LiveWire

Lumber is up by 8.6% in the past month. The whole supply chain is in chaos and the demand remains ahead of production.

The restriction easing decided by the group is indeed a bet that the current soft demand will improve at the same pace as production returns. The group plans to add 2.1 million barrels per day of output by July. The question is, will demand really recover at a pace that will the market absorb all this extra oil? What was not enough might risk to become too much. 

Some major commodities have seen a relatively high volatility in the past week, with moves ranging from -10.9% for lumber and +9.6% for palladium.

Both European and US growth has been moving out of the red zone and into positive levels starting in November. Trafigura Group expects demand to continue rising as it has been and believes prices could soar past $10,000/ton levels as Western economies being resurgence from covid-led troubles to $15,000/ton. Goldman has indicated copper could reach $10,500 within 12 months and Citi sees the asset reaching $12,000 next year in its bull-case scenario.

Investors strongly believe in the comeback of lithium, used for electric batteries, as the EV trend only grows. Miners have raised almost $3.4 billion in equity offering in the US this year, seven times the total amount raised between 2018 and 2020. Albemarle Corporation and SQM are two of the largest companies, and have also raised the most capital, with $1.5 billion and $1.1 billion respectively.