During the last so-called supercycle, which occurred during the period of the late 1990s to 2008, commodities produced extreme returns (e.g. Brent moved from USD 10 to 140) fuelled by the rapid growth in China. The situation today is not comparable, as growth is occurring at more sustainable at levels.
“This strengthens our positive outlook for the future of commodities. Overall, the dynamics of commodity markets now are much more balanced and that makes the universe more investable and attractive”, says Thomas Rutz, fund manager at MainFirst.
We currently like copper and nickel, which are used in batteries and electric vehicle wirings and are going to benefit from the increase in the number of electric cars in the future. Moreover, we believe that current prices do not fully take into account the structural increase in the future demand.
Georgian Mining Corporation (LON:GEO) has 50% ownership of the Bolnisi Copper and Gold Project in Georgia, situated on the prolific Tethyan Belt, a well-known geological region and host to many high-grade copper-gold deposits and producing mines.