Strong gains in commodity prices since the early 2000s created a growing interest in the asset class. The financial industry responded with many products, including new hedge funds, index funds, commodity-linked fixed income products and exchange-traded funds (ETFs). With oil and natural gas making a prominent peak in 2008 and gold hitting a peak in 2011, many took this as a sign that the commodity bull had run its course and expected that we would return to the normal long-standing trend of commodity price defla- tion.
The deflationist camp notes that growth in China must slow down, possibly to a dramatic degree, if imbalances in that economy are not handled carefully. Europe and the US continue their struggle to reignite sorely needed jobs growth in order to relieve high youth unemployment, while at the same time facing demographics that lead to a shrinking labour force.
However the world’s economic situation is resolved, commodities and commodity flows will remain critical to the functioning of cities, states and economies. For this reason, a basic knowledge of the supply and demand issues relevant to each commodity sector provides financial insights even beyond the commodity markets. This book therefore discusses the fundamentals of many of the major traded commodities offering both an introduction and a reference for all those interested in understanding and analysing these markets.