Commodity Cycle

A commodity cycle is the repeating pattern of price ups and downs for raw materials like oil, metals, or agricultural products. Prices rise when demand is strong and supply is tight, then fall when demand weakens or too much supply floods the market. You'll hear about commodity cycles when reading about economic forecasts or industry reports, because they directly affect companies that produce or rely on these materials—and therefore affect your stock picks. For example, if copper prices are climbing because of strong construction demand, mining companies might see their profits surge, but construction firms might see costs rise. Understanding where we are in the cycle helps you anticipate which sectors might outperform next.