China is a big commodity consumer

Sources: Bloomberg, U.S. Department of Agriculture, World Bureau of Metal Statistics, and Wells Fargo Investment Institute. Annual data from January 1, 1980 to December 31, 2023. 2023 data are estimates from the U.S. Department of Agriculture and World Bureau of Metal Statistics. Agricultural commodities represented are corn, soybeans, and wheat. Industrial metals represented are copper, zinc, nickel, and aluminum. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility. Investing in commodities is not appropriate for all investors. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility.

Super-cycle = If you look at commodity prices over the very long term (hundreds of years), it becomes evident that they tend to move in overall bull and bear cycles, some lasting decades. These are super-cycles.

Key Takeaways

  • China is a major commodity consumer, accounting for over half of the world’s demand for industrial metals and almost a quarter of the world’s demand for agricultural commodities.
  • We believe commodity investors should keep an eye on China. If China’s economy falters, we could see a pause in the commodity bull super-cycle.