Bloomberg News

UBS Says Commodity Supercycle ‘Probably’ Over, Cuts Base Metals

April 03, 2013

Commodities supercycle is “probably” over and prices are unlikely to match their performance over the past decade, according to UBS AG.

Growth in China is slowing and becoming less commodity- intensive, London-based strategists Stephane Deo and Ramin Nakisa wrote in a report dated yesterday. The bull cycle for commodities and company profits may also be over because cheap supply of labor in China and Eastern Europe has now been absorbed, they wrote.

UBS cut industrial metals to neutral after a “wrong” recommendation to go long in September and adding to the position at the start of 2013, according to the report. While commodity prices could see some gains in the near future, a recovery would be limited and short-lived, the bank said.

“We were expecting a re-stocking phase, helped by easy money and accelerating activity,” Deo and Nakisa wrote in the Weight Watcher asset allocation report.“This did not happen.”

To contact the editor responsible for this story: Maria Kolesnikova at

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