It’s the start of a commodity supercycle, serial entrepreneur Tvede says

Even with prices at all-time highs, there is a very high likelihood for upward momentum to persist over the coming decade, according to serial entrepreneur and venture capitalist Lars Tvede

In a recent interview with Fastmarkets, the Switzerland-based tech and macro investor talked about how the world’s burgeoning energy transition would drive prolonged demand for metals such as copper and lithium, and how disruptive tech innovation will change supply and demand of commodities in the long run.


Tvede spent 11 years in portfolio management and investment banking before moving into high-tech and telecommunications industries in the mid-1990s. He is the co-founder of the venture capital fund Nordic Eye, Berlin Investment Company AG and Supertrends AG.

Booming demand

Tvede believes the world’s commitment to a low-carbon future will continue to bolster demand for metals.

“We are moving from energy sources that require very little metals to some that require an enormous amount of metal,” he said.

Reaching the goals of the Paris Agreement – limiting global warming to well below 2 degrees Celsius – would mean a quadrupling of mineral requirements for clean energy technologies by 2040, according to a report by the International Energy Agency (IEA).

An even faster transition of achieving net-zero carbon globally by 2050 would require six times more mineral inputs in 2040 than today, according to the IEA.

Electrification is the forefront area in current green energy transition. Metals used in batteries for electrical vehicles include lithium, nickel and cobalt.

In terms of green power, copper, silicon and zinc are critical to solar panels, while copper and aluminum are used in wind turbines.

In addition, Tvede also highlighted post-pandemic housing demand in the United States - he expects “a big property cycle in the US” following the housing shortage and booming demand from households with their excess savings during the pandemic.

“American consumers are loaded. They have so much money during the Covid-19 lockdown where they couldn’t spend anything and the government with monetary policy and fiscal policy was just pumping out money,” he said.

“So you have all these loaded people and there’s not enough real estate. It’s easy to see what’s going to happen.”

Goldman Sachs estimates that US housing starts will increase by 5% to 1.7 million units this year.

Rebar, the key steel product used in residential construction, has seen its prices rising to record-high levels this year.

Fastmarkets’ price assessment for steel rebar fob mill US has held steady at a record high of $56.50 per cwt since March 16. The assessment is 29.1% higher than $43.75 per cwt on May 26, 2021.

Constrained supply

While Russia’s invasion of Ukraine has unleashed commodity shock, the underlying supply problem lies with the inability of the mining sector to keep up with demand, Tvede said.

“There’s not a geological shortage of commodities, but there’s a commercial shortage of commodities,” he said.

The long lead times for a mining project to add new supply to the market means the current supply shortage is there to last, according to Tvede.

For example, it takes on average of 15 years to open a new copper mine until it actually delivers product to the market, he said.

Although surging commodity prices have made mining companies’ finances rosy, generating remarkable cash flow and margins in the recent year, the desire to keep shareholders happy have limited their production growth.

“Companies [in mining sector] have fantastic cash generators. But instead of putting all the money into new capacity, they still return a lot of money to the investors,” Tvede said.

Other challenges mining companies face include a pushback from society against mine development and increasing scrutiny on environmental, social and governance (ESG) requirements.

Investors now opt to pour their money to green projects such as windmills instead of the heavily polluting mining industry, Tvede added.


A supercycle refers to a sustained period of high prices, typically more than a decade, driven by growing demand.

The last major commodity supercycle began around 2002, when emerging markets including China, Russia and India significantly increased demand for metals such as iron ore, copper and aluminium that are key to infrastructure and manufacturing sectors.

“Almost everything in financial markets in 2001, 2002, when the beginning of the supercycle had been breached, were super similar to what it is now,” Tvede said.

“The US industrializing with a rapidly growing middle class, lots of real estate construction and not enough, prior investments in new oil fields, new mines and so on.”

Tvede, who made “fantastic returns” from investing in the last commodity supercycle, tends not to make a specific forecast about the duration and growth rate of prices this time.

“In the long-time horizon, there’s a very high likelihood that that commodities will go up more than they’ve done so far,” he said

That said, Tvede pointed out a couple of setbacks that might challenge this narrative, one being China’s Covid-19 outbreaks.

“I’m talking about 5-10 years or more [of the commodity supercycle],” he said. “It could be that commodities dropped in next three months because people are afraid of recession. We don’t know what happens with the lockdowns in China.”

The world’s second-largest economy has been battling its worst outbreak since early 2020, with draconian lockdowns in a number of cities including Shanghai dampening industrial production and demand for upstream metals.

The weakness seen in China has weighed on the international market.

For example, seaborne cobalt prices, where a decline had not been seen since September last year, softened in May in response to lower offers from Chinese exporters.

Fastmarkets’ price assessment for cobalt standard grade, in-whs Rotterdam was $38.45-39.40 per lb on Thursday May 26, down by 3% from $39.75-40.50 per lb on May 3, this month’s first assessment.

The assessment was up by 92.2% from $20.00-20.50 per lb a year earlier.

Long-term prospects

In the long run, Tvede is optimistic about global resources.

In his book Supertrends: 50 Things you Need to Know About the Future, Tvede argued that the world would never run out of resources due to exponential innovation and decelerating population growth.

He sees a future where commodities become abundant not only because of improved supply but also with shifted demand due to the advancement of technology and innovation.

The transition to less metal-intensive energy will eventually cool down the demand for currently stretched materials.

Nuclear fusion power is one promising alternative energy source for Tvede because “it is more compact, cleaner and safer, while wind and solar take up too much space to supply all our energy.”

He also believes hydrogen power economy will become more widespread in the foreseeable future.

“After 2030, you will see the hydrogen economy really spread out. You have all sorts of hydrogen. You have hydrogen produced by windmills, by solar panels, by nuclear reactors and so on,” he said.

PricewaterhouseCoopers forecasts a moderate demand growth of hydrogen until 2030 because most projects are currently at the pre-commercial phase and it takes 7-12 years to build infrastructure for large-scale hydrogen use.

The accountancy firm expects the growth rate to accelerate after 2030 when production costs decrease by around 50%.

“It takes time. But it’s ongoing and there’s a lot of people very ambitious about it,” Tvede said.

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