HSBC says commodities have entered a ‘super bull market’

HSBC ↘ 5.70% has declared that global commodity markets have entered a "super bull market," driven by the simultaneous collision of geopolitical conflicts, extreme weather, and structural demand growth that the bank says is depleting inventory buffers at an accelerating pace.

In a report published this week, Paul Bloxham, HSBC's Chief Economist for Global Commodities, said the war in Iran, the ongoing Russia-Ukraine conflict, and a strong El Niño event are disrupting supply across energy, metals, and agricultural products, while investments in artificial intelligence infrastructure and the energy transition are pushing demand higher. HSBC raised its forecast for average commodity price increases in 2026 from 16% to 22% and lifted its 2027 projection by 14 percentage points.news.futunn+1

A 'Super Squeeze' Across the Complex

The bank's proprietary COCCLES model, a statistical tool that identifies cyclical phases of commodity prices, now shows the market "convincingly in a 'super-bull' phase," which historically lasts longer than other commodity cycles. London copper futures have traded above $14,700 per ton, while the Bloomberg Commodity Index has reached a 14-year high. The rally has broadened from energy into agricultural products, metals, and other critical materials.zerohedge+1

Six months after the outbreak of the Iran conflict in late February 2026, the Strait of Hormuz remains largely closed to commercial shipping, creating persistent uncertainty for crude oil and refined product supply chains. Houthi attacks in the Red Sea have further disrupted trade through the Bab el-Mandeb Strait. The Russia-Ukraine war, now in its fifth year, has extended supply disruptions beyond crude oil into sulfur, fertilizers, aluminum, and grain.moomoo+3

Depleted Buffers and Structural Demand

HSBC warned that previously elevated inventory levels, which once allowed markets to absorb supply shocks, are rapidly diminishing. In the oil market, continued drawdowns of the U.S. Strategic Petroleum Reserve raise the risk of inventories hitting "tank-bottom" levels, where any new disruption could translate directly into sharp price spikes. European natural gas stocks remain well below target levels heading into winter.news.futunn+1

On the demand side, the AI infrastructure buildout and global electrification continue to support base metals prices, with copper at historic highs reflecting both rising consumption and chronic underinvestment in new mines. Agricultural products face compounding pressure from an intensifying El Niño — the Southern Oscillation Index has reached extreme levels not seen in over two decades — alongside elevated input costs from fertilizer and diesel supply disruptions.moomoo+1