Widespread supply shortages creating unprecedented market: Goldman Sachs commodities head

Goldman Sachs head of commodities research Jeff Currie has described the current market as one he’s never seen before, with supply shortages across the board pushing up prices to new highs.

In a Bloomberg TV interview, the closely followed researcher said: “I’ve been doing this 30 years and I’ve never seen markets like this. This is a molecule crisis. We’re out of everything, I don’t care if it’s oil, gas, coal, copper, aluminum, you name it we’re out of it.”

Futures curves in several markets are trading in super-backwardation — a structure that indicates traders are paying bumper premiums to gain immediate supply in a tight market.

The Bloomberg Commodity Spot Index, which tracks 23 energy, metals and crop futures, has touched a record this year. That has been driven in part by surging oil prices, which have hit their highest level since 2014.

Last month also saw lithium, nickel, copper, iron ore and gold prices rise in tandem, after Currie reiterated his 2021 bet on a commodities ‘supercycle’ taking shape in the coming years.

Meanwhile, the start of February has brought forecasts of escalating demand for rare earths and graphite from the EV space, which is seen as a key part of the clean energy revolution that is predicated on the availability of a range of base metals and critical minerals.