Goldman has finally acknowledged that which MB has argued for years.
While China’s rise lifted all commodity prices in the 2000s “beta” supercycle, we believe that three China trends will create significant relative value “alpha” opportunities across different commodities.
Specifically, Beijing’s 1) focus on security of commodity supply, 2) supply-side decarbonization strategy, and 3) its overall slowdown in growth have divergent effects on global commodity demand growth, which are mostly positive for gold and copper, mostly negative for oil, and negative for ferrous metals.
