Commodities as an asset class have had 5 years of a severe bear market losing an average of 50% of value.
Energy and metals have the following factors in their favour: prices of many commodities have found a bottom but still remain priced at low levels, inventory surpluses are decreasing and large corporates are focused on cost saving and are cutting production and exploration.
Demand will grow fuelled by growing populations, a growing middle class and unprecedented urbanisation.
Due to these factors, in the next 24-36 months we expect to see negative market balances as demand exceeds supply significantly which could lead to significant increases in commodity prices.
Many analysts believe that the lows of January 2016 could be the beginning of a new multi-year commodity cycle.
NRC Private Equity is ideally positioned to take advantage of the new multi-year commodity cycle.
