The 2020s commodities boom refers to the rise of many

commodity In economics, a commodity is an economic goods, good, usually a resource, that specifically has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to w ...

prices in the early

2020s The 2020s (pronounced "twenty-twenties" or "two thousand ndtwenties"; shortened to "the '20s" and also known as "The Twenties") is the current decade that began on 1 January 2020, and will end on 31 December 2029. The 2020s began with th ...

following the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

. The

COVID-19 recession The COVID-19 recession was a global economic recession caused by COVID-19 lockdowns. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activit ...

initially made commodity prices drop, but lockdowns,

supply chain A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers, while supply chain management deals with the flow of goods in distri ...

bottlenecks, and dovish

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rat ...

limited

supply Supply or supplies may refer to: *The amount of a resource that is available **Supply (economics), the amount of a product which is available to customers **Materiel, the goods and equipment for a military unit to fulfill its mission *Supply, as ...

and created excess

demand In economics, demand is the quantity of a goods, good that consumers are willing and able to purchase at various prices during a given time. In economics "demand" for a commodity is not the same thing as "desire" for it. It refers to both the desi ...

causing a commodity super cycle rise. The

Russian invasion of Ukraine On 24 February 2022, , starting the largest and deadliest war in Europe since World War II, in a major escalation of the Russo-Ukrainian War, conflict between the two countries which began in 2014. The fighting has caused hundreds of thou ...

beginning in February 2022 worsened the bottlenecks, creating the 2022–2023 Russia–European Union gas dispute and the 2021 United Kingdom natural gas supplier crisis, contributing to the Global energy crisis (2021–2023). As Russia and Belarus are major fertilizer exporters and natural gas is a primary component in many

fertilizer A fertilizer or fertiliser is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from liming materials or other non-nutrient soil amendments. Man ...

s, fertilizer prices rose accordingly, exacerbating the 2022–2023 global food crises. The previous commodity super cycle was the

2000s commodities boom The 2000s commodities boom, commodities super cycle or China boom was the rise of many physical commodity prices (such as those of food, oil, metals, chemicals and fuels) during the early 21st century (2000–2014), following the Great Commoditie ...

, which was attributed to

emerging market An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or we ...

s, especially that of

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

, providing a high demand for

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials/Intermediate goods that are feedstock for future finished ...

Food

Global food shortages already existed due to the COVID-19 pandemic when, during the

2022 Russian invasion of Ukraine On 24 February 2022, , starting the largest and deadliest war in Europe since World War II, in a major escalation of the Russo-Ukrainian War, conflict between the two countries which began in 2014. The fighting has caused hundreds of thou ...

, Russia

blockade A blockade is the act of actively preventing a country or region from receiving or sending out food, supplies, weapons, or communications, and sometimes people, by military force. A blockade differs from an embargo or sanction, which are ...

d the Port of Odesa, preventing grain exports. Ukraine is known as the

breadbasket The breadbasket of a country or of a region is an area which, because of the richness of the soil and/or advantageous climate, produces large quantities of wheat or other grain. Rice bowl is a similar term used to refer to Southeast Asia; Calif ...

of Eastern Europe because of its fertile soil and exports of

wheat Wheat is a group of wild and crop domestication, domesticated Poaceae, grasses of the genus ''Triticum'' (). They are Agriculture, cultivated for their cereal grains, which are staple foods around the world. Well-known Taxonomy of wheat, whe ...

corn Maize (; ''Zea mays''), also known as corn in North American English, is a tall stout Poaceae, grass that produces cereal grain. It was domesticated by indigenous peoples of Mexico, indigenous peoples in southern Mexico about 9,000 years ago ...

, and sunflower oil.

Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...

and the

United Nations The United Nations (UN) is the Earth, global intergovernmental organization established by the signing of the Charter of the United Nations, UN Charter on 26 June 1945 with the stated purpose of maintaining international peace and internationa ...

brokered the Black Sea Grain Initiative between Russia and Ukraine, allowing the controlled export of grain through the Port to the

Black Sea The Black Sea is a marginal sea, marginal Mediterranean sea (oceanography), mediterranean sea lying between Europe and Asia, east of the Balkans, south of the East European Plain, west of the Caucasus, and north of Anatolia. It is bound ...

, though shipments have yet to reach prewar levels. Natural gas is in most fertilizers, and fertilizer prices rose due to the Russia–European Union gas dispute, contributing to the food crises.

Oats

Hectare The hectare (; SI symbol: ha) is a non-SI metric unit of area equal to a square with 100-metre sides (1 hm2), that is, square metres (), and is primarily used in the measurement of land. There are 100 hectares in one square kilometre. ...

s of oats are down in

North America North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...

along with droughts in the United States is limiting supply. Demand is up around the world for oats and 38.5% in one year for

East Asia East Asia is a geocultural region of Asia. It includes China, Japan, Mongolia, North Korea, South Korea, and Taiwan, plus two special administrative regions of China, Hong Kong and Macau. The economies of Economy of China, China, Economy of Ja ...

Orange juice

Orange juice Orange juice is a liquid extract of the orange (fruit), orange tree fruit, produced by squeezing or reaming oranges. It comes in several different varieties, including blood orange, navel oranges, valencia orange, clementine, and tangerine. As ...

prices have been close to an all-time high in 2022 because of Hurricanes Ian and Nicole. Citrus greening disease has been causing damage to citrus trees in the United States since 1998 when it was discovered, dropping the orange production by half.

Eggs

Bird flu outbreaks 2020–2023 H5N8 outbreak and the 2020–2023 H5N1 outbreak has affected the number of egg laying hens and output.

Rice

India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...

put an export ban on

white rice White rice is milled rice that has had the husk, bran, and germ removed. This alters the flavor, texture and appearance of the seed; helps prevent spoilage (extends its storage life); and makes it easier to digest. After brown rice is milled ...

in July 2023, and placed an export tax on

parboiled rice Parboiled rice, also called converted rice, easy-cook rice, sella rice, and miniket (as predominantly called in West Bengal and Odisha in India, and in Bangladesh) is rice that has been parboiling, partially boiled in the husk. The three basic s ...

exports in August 2023. India is the largest exporter of rice and other counties that export a lot of rice their export prices climbed along with India.

Sub-Saharan Africa Sub-Saharan Africa is the area and regions of the continent of Africa that lie south of the Sahara. These include Central Africa, East Africa, Southern Africa, and West Africa. Geopolitically, in addition to the list of sovereign states and ...

is expected to feel the biggest impact from the export control measures.

Cocoa

West Africa West Africa, also known as Western Africa, is the westernmost region of Africa. The United Nations geoscheme for Africa#Western Africa, United Nations defines Western Africa as the 16 countries of Benin, Burkina Faso, Cape Verde, The Gambia, Gha ...

, a top producing region of cocoa was hit by strong

Harmattan The Harmattan is a season in West Africa that occurs between the end of November and the middle of March. It is characterized by the dry and dusty northeasterly trade wind, of the same name, which blows from the Sahara over West Africa into th ...

winds that lead to drier climates. The region produces 3/4 of all

cocoa beans The cocoa bean, also known as cocoa () or cacao (), is the dried and fully fermented seed of ''Theobroma cacao'', the cacao tree, from which cocoa solids (a mixture of nonfat substances) and cocoa butter (the fat) can be extracted. Cacao trees ...

Lumber

Lumber prices increased with the hot housing market. Potential new American

tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...

s of 17.99% on Canadian lumber also sent the price higher. Those tariffs were finalized lower to 11.64% by the

Biden administration Joe Biden's tenure as the List of presidents of the United States, 46th president of the United States began with Inauguration of Joe Biden, his inauguration on January 20, 2021, and ended on January 20, 2025. Biden, a member of the Democr ...

. New contracts that allow semi trucks to haul contracts instead of just rail cars starting August 8, 2022, potentially contributing to normalization of prices in the second half of 2022. Mortgage interest rates rising with inflation is another reason for cooling housing demand and consequently lumber as well.

Natural gas

Natural gas prices have increased around the world. In Europe, Russia invaded Ukraine, impacting the continent's dependence on Russia for

natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...

via

pipelines A pipeline is a system of pipes for long-distance transportation of a liquid or gas, typically to a market area for consumption. The latest data from 2014 gives a total of slightly less than of pipeline in 120 countries around the world. The Un ...

. Russia has economically weaponized natural gas and reduced flows on pipelines like the

Nord Stream 1 Nord Stream (Denglisch, German–English mixed expression for "North Stream 1"; ) is a pair of offshore natural gas pipeline transport, pipelines in Europe that run under the Baltic Sea from Russia to Germany. It consists of the Nord Stream 1 ( ...

. Natural gas prices had been increasing worldwide before the invasion of Ukraine and increased substantially thereafter; in some areas, the price of gas has increased more than tenfold. Natural gas recently became more of a global market with

liquefied natural gas Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volume o ...

and LNG ships maturing in size with

Qatar Qatar, officially the State of Qatar, is a country in West Asia. It occupies the Geography of Qatar, Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it shares Qatar–Saudi Arabia border, its sole land b ...

being a world leader in exporting LNG. This

globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...

of this fungible commodity has caused the prices to shadow each other more in different markets. Previously, natural gas was more difficult to ship, and required pipeline infrastructure, which generally can only be emplaced on land, or for relatively short distances undersea. With the increased use of LNG, gas can be shipped by sea, albeit with the requirement of specialized port facilities.

Piped natural gas

Piped natural gas prices have been rising steadily throughout the U.S. since 2020 but California has experienced exceptionally higher prices because of bad weather, a pipe explosion on the El Paso Natural Gas pipeline, unscheduled maintenance, and the Aliso Canyon

gas leak A gas leak refers to a leak of natural gas or another gaseous product from a pipeline or other containment into any area where the gas should not be present. Gas leaks can be hazardous to health as well as the environment. Even a small leak into ...

at the storage facility in the past, so it stores less now.

Crude oil and petroleum products

Crude oil prices dropped dramatically during the first months of the COVID Pandemic ( WTI went negative for a day) and production was cut in anticipation of a prolonged slowdown. Demand soon exceeded supply because of loose monetary policy causing a global energy crisis and prices to rise. Russia's invasion of Ukraine also resulted in price increases due to sanctions and trade restrictions.

Jet fuel

Kerosene jet fuel

refining Refining is the process of purification of a (1) substance or a (2) form. The term is usually used of a natural resource that is almost in a usable form, but which is more useful in its pure form. For instance, most types of natural petroleum w ...

has to compete with

Diesel fuel Diesel fuel, also called diesel oil, heavy oil (historically) or simply diesel, is any liquid fuel specifically designed for use in a diesel engine, a type of internal combustion engine in which fuel ignition takes place without a spark as a re ...

and

gasoline Gasoline ( North American English) or petrol ( Commonwealth English) is a petrochemical product characterized as a transparent, yellowish, and flammable liquid normally used as a fuel for spark-ignited internal combustion engines. When for ...

at the refineries when refining

petroleum product Petroleum products are materials derived from crude oil (petroleum) as it is processed in oil refineries. Unlike petrochemicals, which are a collection of well-defined usually pure organic compounds, petroleum products are complex mixtures. Mos ...

s. Jet fuel topped $5 a gallon in 2022.

Kerosene heating oil #1

Kerosene Kerosene, or paraffin, is a combustibility, combustible hydrocarbon liquid which is derived from petroleum. It is widely used as a fuel in Aviation fuel, aviation as well as households. Its name derives from the Greek (''kērós'') meaning " ...

heating oil Heating oil is any petroleum product or other oil used for heating; it is a fuel oil. Most commonly, it refers to low viscosity grades of fuel oil used for furnaces or boilers for home heating and in other buildings. Home heating oil is often ...

was approaching $4 per gallon in March 2022. The EIA stopped reporting the data in March 2022. Kerosene wholesale price

Diesel heating oil #2

Diesel

went from around $2 before the

pandemic A pandemic ( ) is an epidemic of an infectious disease that has a sudden increase in cases and spreads across a large region, for instance multiple continents or worldwide, affecting a substantial number of individuals. Widespread endemic (epi ...

to almost $5 a gallon in 2022. The prices have peaked and are falling in 2022.

RBOB gasoline

RBOB stands for Reformulated Blendstock for Oxygenate Blending and is refined from

crude oil Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring u ...

and blended with 10% ethanol fuel. The price of RBOB closely follows the price of crude oil. RBOB plus the excise taxes on fuel reflect the price paid at the pump for gasoline.

Electricity

Electricity prices rose in the United States through 2021 and 2022 mostly from the increase in natural gas prices which makes up the 35% of electricity generated in the United States.

Lithium

The price of

lithium carbonate Lithium carbonate is an inorganic compound, the lithium salt of carbonic acid with the chemical formula, formula . This white Salt (chemistry), salt is widely used in processing metal oxides. It is on the WHO Model List of Essential Medicines, Wor ...

started to rise in 2021 after slumping in 2020 and peaked in early 2022 close to $80,000 per

ton Ton is any of several units of measure of mass, volume or force. It has a long history and has acquired several meanings and uses. As a unit of mass, ''ton'' can mean: * the '' long ton'', which is * the ''tonne'', also called the ''metric ...

. Demand for electric vehicles around the world is the primary cause for the price rise. In 2021, electric vehicle sales doubled to 6.6 million from 2020.

Copper

The price of copper rose through 2021 and peaked close to $5 per pound in Q2 2022 before retreating. Copper demand is expected to double from 25 million metric

tonne The tonne ( or ; symbol: t) is a unit of mass equal to 1,000 kilograms. It is a non-SI unit accepted for use with SI. It is also referred to as a metric ton in the United States to distinguish it from the non-metric units of the s ...

s in 2022 to over 50 MMT by the year 2035. The pandemic significantly increased the long-term equilibrium volatility of returns in the copper futures market, nearly doubling it.

Nickel

In March 2022

nickel Nickel is a chemical element; it has symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive, but large pieces are slo ...

prices spiked higher over fear of the

as Russia produced 15.2% of world nickel in 2021.

Tin

Prices of

tin Tin is a chemical element; it has symbol Sn () and atomic number 50. A silvery-colored metal, tin is soft enough to be cut with little force, and a bar of tin can be bent by hand with little effort. When bent, a bar of tin makes a sound, the ...

were up 79% in 2021 because of high demand for

circuit board A printed circuit board (PCB), also called printed wiring board (PWB), is a laminated sandwich structure of conductive and insulating layers, each with a pattern of traces, planes and other features (similar to wires on a flat surface) ...

Titanium

Demand for

titanium Titanium is a chemical element; it has symbol Ti and atomic number 22. Found in nature only as an oxide, it can be reduced to produce a lustrous transition metal with a silver color, low density, and high strength, resistant to corrosion in ...

is high because defense spending increases on and resulting from the

Russo-Ukrainian War The Russo-Ukrainian War began in February 2014 and is ongoing. Following Ukraine's Revolution of Dignity, Russia Russian occupation of Crimea, occupied and Annexation of Crimea by the Russian Federation, annexed Crimea from Ukraine. It then ...

, parts for aircraft makers and defense contractors; additionally, automotive industry demand for

titanium dioxide Titanium dioxide, also known as titanium(IV) oxide or titania , is the inorganic compound derived from titanium with the chemical formula . When used as a pigment, it is called titanium white, Pigment White 6 (PW6), or Colour Index Internationa ...

pigments remains high.

Rolled steel

Hot-rolled steel prices hit close to $2,000 per

in 2021.

Palladium

Palladium Palladium is a chemical element; it has symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal discovered in 1802 by the English chemist William Hyde Wollaston. He named it after the asteroid Pallas (formally 2 Pallas), ...

is used widely in

catalytic converter A catalytic converter part is an vehicle emissions control, exhaust emission control device which converts toxic gases and pollutants in exhaust gas from an internal combustion engine into less-toxic pollutants by catalysis, catalyzing a redox ...

s to curb harmful emissions from car

exhaust Exhaust, exhaustive, or exhaustion may refer to: Law * Exhaustion of intellectual property rights, limits to intellectual property rights in patent and copyright law ** Exhaustion doctrine, in patent law ** Exhaustion doctrine under U.S. law, i ...

. Russia produces 40% of all palladium in the world, and the

has rattled the palladium market.

Rhodium

Rhodium Rhodium is a chemical element; it has symbol Rh and atomic number 45. It is a very rare, silvery-white, hard, corrosion-resistant transition metal. It is a noble metal and a member of the platinum group. It has only one naturally occurring isot ...

is used widely in automotive

s. Many countries have agreed to the

Paris climate agreement The Paris Agreement (also called the Paris Accords or Paris Climate Accords) is an international treaty on climate change that was signed in 2016. The treaty covers climate change mitigation, adaptation, and finance. The Paris Agreement was ...

to cut car emissions and have higher standards for exhaust.

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...

produces 80–90% of Rhodium each year. Russia is the second largest producer of rhodium but it is around 1%. The

COVID-19 pandemic in South Africa The COVID-19 pandemic in South Africa was part of the pandemic of coronavirus disease 2019 (COVID-19) caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). On 5 March 2020, Minister of Health Zweli Mkhize had confirme ...

caused the country to enact

lockdown A lockdown () is a restriction policy for people, community or a country to stay where they are, usually due to specific risks that could possibly harm the people if they move and interact freely. The term is used for a prison protocol that us ...

restrictions in March 2020 and again in December 2020 – March 2021. This affected the supply of Rhodium causing the price to increase.

Gold

Gold started to increase in price at the start of the

as stocks sunk initially; gold is commonly seen as a safe haven from inflation and stock volatility. Gold crossed the $2,000 mark for the first time in August 2020 and again in March 2022.

Iron ore

is the number one consumer of

iron ore Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red. The iron is usually found in the f ...

, importing 80% of all internationally traded iron ore. The price has been very volatile because of curbs the CCP has placed on the

steel industry Steel is an alloy of iron and carbon that demonstrates improved mechanical properties compared to the pure form of iron. Due to steel's high elastic modulus, yield strength, fracture strength and low raw material cost, steel is one of the ...

to meet emission standards.

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...

, and China are the top three producers of iron ore.

Cotton

In the Western United States there have been persistent droughts in the 2020s hurting cotton yields among other agricultural products.

References

{{Financial bubbles Commodity booms Open economy macroeconomics 2000s in economic history 21st century in economic history