NextFin News - BlackRock's Evy Hambro is calling a new commodity cycle, and this time he argues the engine is fundamentally different from the China boom that defined the last one. Hambro, BlackRock's global head of thematic and sector investing and co-lead manager of the BlackRock World Mining Trust, says disruption rates in commodity supply are "much, much higher than they have been" at the same time demand is growing faster than supply — a combination that points to a structural regime shift rather than a cyclical spike.
The call lands on a market that has already moved. Brent crude traded around $103 a barrel on September 29, 2026, up more than 56% year on year and up nearly 14% in a single month. LME copper broke to a record above $14,500 a tonne in early September, and gold has been bid to record territory with major banks lifting year-end targets toward $6,300 an ounce. Across the complex, the common thread is the same: supply that cannot respond quickly, meeting demand that no longer depends on a single economy.
The central tension of this story is simple but uncomfortable for investors raised on the China playbook: what if the commodity rally is not a cyclical trade to fade, but a structural repricing that has further to run? Hambro's answer is that the buyer base, the demand drivers, and the supply constraints have all changed at once.
The Situation: A Rally Built on Three Legs
The commodity complex has not rallied on one story. It has rallied on three, and the combination is what makes Hambro's call worth taking seriously.
First, energy. Brent's climb from around $63 a barrel in December 2025 to above $100 in September 2026 is not a drill. The spot price averaged $113.22 a barrel in September, up from $91.08 in August, after spiking as high as $130.80 mid-month on Middle East supply fears. This is the cyclical leg of the trade — a war premium layered on years of underinvestment in upstream capacity.
Second, industrial metals, led by copper. Benchmark LME copper traded above $14,500 a metric tonne on September 8, a new all-time high, after rising roughly 16% through 2026. The rally has been driven by simultaneous supply disruptions across Chile, the Democratic Republic of Congo and Indonesia, U.S. tariff measures that have rerouted physical flows, China's tighter scrap-copper rules, and a structural demand wave from AI data centers and grid reinforcement.
Third, gold. Here the story is not inflation, at least not only inflation. It is a change in the marginal buyer. The World Gold Council's 2026 Central Bank Gold Reserves Survey, covering 76 institutions, found central banks have averaged 1,000 tonnes of purchases a year for four consecutive years — double the 500-tonne average of the prior decade. Net purchases in the second quarter alone totaled 289 tonnes, more than five times the prior quarter and a record for a second quarter. A record 45% of respondents said they plan to increase holdings over the coming year, and 89% expect global reserves to keep rising.
"The thing that had struck me most about where we are today is the focus that governments have around the world on critical minerals, or where they are going to get their minerals, relative to the complacency of investors. The thing that wasn't really there in the China cycle is the focus from governments."
That line, delivered by Hambro at a mining industry forum in London, captures the thesis in one sentence: the state has re-entered the commodity market as a strategic actor, not just a regulator.
Analysis
Why This Cycle Is Not the China Cycle
The most important question Hambro's call raises is also the easiest to get wrong: is this 2006 all over again? The surface resemblance is strong — a supercycle narrative, soaring base metals, a wave of mining optimism. But the mechanism underneath is different, and getting this backwards is how investors lose money.
The China cycle was a demand shock from a single, fast-industrializing economy. When China's property sector rolled over, the commodity complex rolled over with it, because one buyer accounted for the marginal tonne. This cycle is demand from multiple, policy-anchored sources: AI data-center buildout, electrical grid investment, defense rearmament, and energy transition. They are not synchronized to a single property credit cycle, which means a slowdown in one does not automatically sink the rest.
On the supply side, the difference is starker. The last cycle ended in a decade of underinvestment, and the industry never fully recovered. Hambro's September 8 comment put it plainly: "The disruption rates are much, much higher than they have been. And this has occurred at a time when demand is actually growing faster than supply." Disruption is not the same as underinvestment. It is a measure of how much existing production is at risk — from geopolitics, from resource nationalism, from aging ore bodies, from permitting. A market can add new mines slowly and still run a deficit if existing mines keep failing.
The numbers back the mechanism. UBS Wealth Management projects the global copper deficit widening from 219,000 tonnes in 2026 to 379,000 tonnes in 2027, with a price target of $15,500 a tonne. Industry research estimates AI facilities alone could consume roughly 400,000 tonnes of copper a year over the next decade, peaking near 572,000 tonnes in 2028 as hyperscaler construction hits its most capital-intensive phase. J.P. Morgan sees a refined copper deficit of roughly 330,000 tonnes in 2026. These are not marginal imbalances; they are deficits large enough that price, not supply, has to ration demand.
BlackRock's own positioning reflects the conviction. In recent months Hambro and co-manager Olivia Markham have been adding back into gold miners after their sell-off, rotating capital toward assets that trade at a discount to the metal prices they will realize. The trust they run has delivered a 2,606% total return since Hambro took the helm in September 2000, and returned 74.2% in net asset value terms in the year to December 2025, ahead of its benchmark's 64.2%.
The Second-Order Trade: Copper Is No Longer a Macro Barometer
Here is the implication most market participants have not fully absorbed. For decades, copper was "Dr. Copper" — the metal with a PhD in economics, a clean read on global growth. That function is breaking.
When a growing share of copper demand comes from AI infrastructure and grid investment rather than traditional industrial activity, a record copper price no longer necessarily signals accelerating global growth. It can signal a sector-specific squeeze while the broader economy slows. That decoupling matters for cross-asset positioning: a portfolio hedged on the assumption that high copper means strong growth is hedged against the wrong risk.
The same logic runs through gold. The old rule was that gold rises when real rates fall and ETF demand in the West picks up. The new rule is that gold rises when sovereign buyers diversify reserves away from dollar assets, regardless of the Federal Reserve's path. That is why gold can hold near record highs even as rate-cut expectations shift. The marginal buyer is no longer a Western bond fund; it is a central bank with a multi-decade horizon and a strategic, not tactical, mandate.
Behind both moves sits a third, quieter driver: fiscal arithmetic. Hambro has argued that governments cannot stop printing money — not because they want to, but because debt-service burdens leave them no politically acceptable alternative. In that world, hard assets are not an inflation hedge so much as a hedge against the credibility of the liabilities that fiat money represents. That is a deeper claim than "commodities do well when inflation is high," and it is why the cycle, if Hambro is right, is measured in years rather than quarters.
The Equity Gap: Miners Trade Below the Metal They Will Produce
The cleanest expression of the thesis may not be the metals themselves, but the companies that extract them — and the valuation gap between the two. Mining equities have lagged the metals through much of the rally, a pattern Hambro has pointed to as an opportunity. Investors burned in the last cycle demand proof that management discipline has changed before they pay for reserves, while the metal prices those reserves will monetize are already at record levels.
That gap is the asymmetry. If the deficit widens as projected and holds, miners' cash flows reprice toward the metal, and the equity multiple expands with it — a double benefit. If the cycle proves cyclical after all, the same leverage works in reverse, which is why the falsifying signal below matters as much as the base case.
The Cyclical Leg Is Real — And That Is the Risk
A clean structural thesis is seductive. The problem is that this rally is not purely structural. The oil leg is heavily cyclical — a war premium that can evaporate on a ceasefire. Gold's volatility is real even in a bull market: bullion fell about 5% in a single week to $4,044 an ounce earlier in 2026, its sharpest weekly loss of the year, even as the central-bank bid continued underneath.
Separating the two legs is the discipline the thesis requires. The structural leg is the supply constraint, the multi-polar demand base, and the sovereign buyer of last resort. The cyclical leg is the Middle East risk premium and any China stimulus impulse. If an investor conflates them, they will either exit a structural position on a cyclical pullback, or hold a cyclical position believing it is structural.
The Adversarial Case
The strongest counter-thesis is not that Hambro is wrong about supply. It is that the market has already priced him right, and that the demand story is more fragile than it looks. Goldman Sachs cut its 2026 gold price target to $4,900 an ounce after the June Federal Reserve meeting, well below J.P. Morgan's $6,300 and Wells Fargo's $6,100–$6,300 range. Morgan Stanley projects $5,700. The dispersion among major banks is itself evidence that the consensus is not settled.
The deeper counter-argument: if global growth disappoints and China's stimulus fails to translate into industrial demand, the AI and grid demand wave may not be large enough, fast enough, to offset a cyclical downturn in the rest of the complex. A recession in the U.S. or a hard landing in China would hit copper's non-AI demand — construction, autos, consumer durables — which still dwarfs data-center offtake in absolute terms. The structural thesis wins over a decade; the cyclical leg can inflict a deep drawdown on the way.
The falsifying signal is specific. If LME copper falls back below $10,000 a tonne and Brent settles below $70 a barrel as geopolitical risk recedes and China stimulus disappoints, the "structural new cycle" thesis fails. At that point the move was a cyclical super-spike, not a regime shift, and the correct posture is to fade rallies rather than buy dips.
Outlook: Who Benefits, Who Is Exposed, and What to Watch
Translating the mechanism into impact: the beneficiaries are producers with long-life, low-cost assets in stable jurisdictions, and the mining equities that trade at a discount to the metal prices they will realize over the next decade. The exposed are manufacturers and utilities locked into long-dated input costs without pricing power, and investors short commodities on the assumption that the last cycle's playbook still applies.
What to watch, split by horizon:
- Short term (sentiment and liquidity): Middle East de-escalation and the oil risk premium; weekly inventory and disruption data for copper; gold's weekly moves, which remain violent even in a bull market.
- Medium term (fundamentals): the copper deficit — UBS's projected widening from 219,000 tonnes in 2026 to 379,000 tonnes in 2027 — and whether mine supply responds; central-bank gold purchases quarter by quarter, where 289 tonnes in the second quarter set a new benchmark.
- Long term (structural): whether AI and grid demand reaches the 400,000–572,000 tonne annual range projected for the next decade, and whether government stockpiling of critical minerals becomes a permanent feature of demand rather than a temporary insurance policy.
Scenarios, not a single line. The base case is a grinding deficit with prices holding well above the prior cycle's averages, punctuated by sharp cyclical pullbacks that test conviction. The upside case is a supply shock — a major mine disruption or an escalation in the Strait of Hormuz — pushing copper toward $15,500 and Brent back above $130. The downside case is a synchronized global slowdown that drags copper below $10,000 and oil below $70, proving the structural thesis premature.
The closing judgment: this is not a commodity cycle to trade around a China data print. It is a repricing of what commodities are worth when supply is politically constrained, demand is policy-anchored, and the buyer of last resort wears a central-bank badge. The investors who get hurt are the ones who recognize the structural shift but manage it with cyclical discipline.
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