Commodity markets are in a ‘super squeeze’ — and higher prices could be here to stay
SUIXI, CHINA – DECEMBER 30: An employee works on the production line of aluminum foil at a workshop of Anhui Limu New Material Technology Co., Ltd on December 30, 2023 in Suixi County, Huaibei City, Anhui Province of China. (Photo by Li Xin/VCG via Getty Images)
Vcg | Visual China Group | Getty Images
Global commodity markets are in a “super squeeze” amid supply disruptions and lack of investment — and it’s only going to get worse as geopolitical and climate risks exacerbate the situation, HSBC said.
“For some time now we have described global commodity markets as being in a ‘super-squeeze,'” its chief economist Paul Bloxham told CNBC.
A commodity “super squeeze” is denoted by higher prices driven by supply constraints more than a robust growth in demand, he explained.
“If it’s a supply constraint that’s driving high commodity prices, it’s a very different story for global growth,” said via Zoom. Higher prices as a result of a super squeeze are “not as positive.”
“We see the deeper ‘super-squeeze’ factors on the supply-side as still set to play a key role in keeping commodity prices elevated,” he said, outlining factors like political uncertainties, climate change and the lack of investments into the green energy transition.
The super squeeze could be deeper, or more prolonged if geopolitical, climate change or energy transition related supply disruptions are larger than expected.
Paul Bloxham
HSBC chief economist
Geopolitical risks include the ongoing Israel-Hamas conflict in Gaza and the Ukraine war, which have hampered global trade, as seen in shipping disruptions from the recent Houthi attacks in the Red Sea.
Another reason is climate change, which disrupts supply chains as well as commodities supply, especially in the agricultural space.
“The super squeeze could be deeper, or more prolonged if geopolitical, climate change or energy transition related supply disruptions are larger than expected,” he added.
Lack of investments
The world’s pursuit of a net-zero carbon future is fueling demand for energy transition metals such as copper and nickel, Bloxham pointed out.
However, there are insufficient investments allocated to procuring these critical minerals, leading to a sharper supply squeeze on energy transition metals — in particular copper, aluminum and nickel, he said.
As energy transition ramps up, markets could be looking at a shortage of a slew of metals like graphite, cobalt, copper, nickel and lithium in the next decade, the Energy Transitions Commission said in a report in July.
At the recent COP28 climate change conference, more than 60 countries backed a plan to triple global renewable energy capacity by 2030, in what is largely deemed as a step forward for energy transition and a further boost in demand for metals required for that transition.
“Large-scale mining projects can take 15-20 years, and the last decade has seen a lack of investment in exploration and production for key energy transition materials,” the report said.
Annual capital investments in these metals averaged $45 billion in the last two decades, and must rise to around $70 billion each year through to 2030 to ensure an ample stream of supply, according to the ETC report.
Commodities are notoriously volatile asset classes, with a long history that is prone to a short squeeze and the current landscape points to more of the same.
Brian Luke
S&P Dow Jones Indices
Without more investment in new capacities, supply will be constrained, HSBC’s Bloxham said, adding that “for any given amount of demand,” it should be expected that commodity prices will stay more elevated than in the past.
“That seems to be playing out across many of the commodities at the moment.”
Technology could also be a gamechanger if a development came along and made it much easier to extract the metals used in the battery space, Bloxham added.
Iron ore site in Australia.
Ian Waldie | Bloomberg via Getty Images
He did not say how long it will take global commodity markets to move out of the squeeze, but one way out of it — which would also push commodity prices lower — is a “bigger and deeper [economic] downturn globally,” he said.
“Commodities are notoriously volatile asset classes, with a long history that is prone to a short squeeze and the current landscape points to more of the same,” said Brian Luke, senior director and head of commodities at S&P Dow Jones Indices. He highlighted that extreme weather events and geopolitics have also impacted the agricultural and energy commodity baskets.
Metals most impacted
Analysts say metals will likely see the most upside.
Bloxham noted that aside from clean energy metals, iron ore was also on his list due to falling inventory and a lack of investments into expanding capacity.
Iron ore has seen a price jump of over 24% in the last year, according to data from FactSet. The benchmark 62%-grade iron ore last traded at $135.48 per ton.
“The reason why [iron ore] has a sudden squeeze-up is because inventory has been very low,” said Bank of America Securities’ head of Asia -Pacific basic materials, Matty Zhao.
She noted that in spite of China’s property crisis, steel production has continued, fueling demand for iron ore and coking coal, which are integral to steelmaking.
China, which makes around 55% of the world’s steel, produced 874.7 million tons of steel in the first 10 months of 2023 — up 1.4% across the same period in 2022.
What squeeze?
While risks remain, one analyst is of the view that commodity markets are still “adequately supplied” for the most part.
“The commodity markets are currently focused on slumping demand due to the sluggish global economy. As such, there’s not too much concern about supplies,” said Arlan Suderman, chief commodities economist at financial services firm StoneX.
Oil, for one, saw an increase in global oil inventories in 2023.
Some are still hoping that a rebound in Chinese demand will help.
“A resurgence from Asia will go a long way in determining if commodities will have a breakout year,” said S&P’s Luke, adding that 2023 saw a year of unfulfilled demand from China which weighed heavily on commodity markets.
President Trump has nominated Jonathan Morrison to lead the National Highway Traffic Safety Administration (NHTSA). Morrison has previously criticized and tussled with Tesla in his previous role at NHTSA.
Morrison is now Trump’s nominee to head the National Highway Traffic Safety Administration, which is in charge of regulating the auto industry in the US.
The attorney was the agency’s Chief Counsel during Trump’s first term, and he had a few disputes with Tesla during that time.
In September 2018, the US National Highway Traffic Safety Administration (NHTSA) released its Tesla Model 3 crash test results, and the EV got five-star safety ratings in every category.
Tesla interpreted the data from the test and claimed that Model 3 achieved “the lowest probability of injury of any vehicle ever tested by NHTSA“.
Morrison sent Tesla a cease-and-desist letter over the claim, arguing that it was misleading.
The lawyers also subpoenaed Tesla to get data about a specific crash in 2019.
Next week, Morrison is expected to have his confirmation hearing in the Senate and could take up his role shortly after.
The nomination is significant in the context of the current feud between Tesla CEO Elon Musk and President Trump.
Musk has been criticizing Trump and his allies over their recently passed budget and tax bill, which is expected to significantly increase the federal government’s debt and eliminate virtually all subsidies to electric vehicles and renewable energy, potentially harming Tesla.
Trump has warned Musk that he could go directly after his companies and NHTSA would be the top vehicle for that when it comes to Tesla.
The agency had already launched several investigations into Tesla over the years, with the largest one examining Tesla’s Full Self-Driving program and several fatal crashes related to the ADAS system.
Electrek’s Take
Most NHTSA probes into Tesla have resulted in slaps on the wrist at best, but this FSD probe involves several fatal crashes, and even though it started under the Biden administration, it could potentially ramp up under Trump, especially amid his feud with Musk.
On the one hand, it’s disheartening to see the US reach this point, where feuds between billionaires and elected officials are settled through regulatory agencies. Still, at the same time, Musk did buy the election for Trump, so he created this situation in the first place, and there are serious concerns about how safe FSD is.
At the very least, I would hope that NHTSA will start to force Tesla to release all its FSD crash and disengagement data.
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You might remember the GEM as a quirky little electric microcar that’s been cruising through campuses, resorts, and planned communities for years. But now, it’s taking on a more serious job – saving lives. Waev Inc., the maker behind the long-running GEM electric vehicle line, has just unveiled the GEM Ambulance, a purpose-built, all-electric, street-legal low-speed vehicle (LSV) designed specifically for emergency medical services.
While it might not replace a full-size ambulance on high-speed highways, this new electric responder is tailor-made for the dense environments where conventional ambulances often struggle: college campuses, sporting events, entertainment venues, airports, and more. With a top speed of 25 mph, it’s built for maneuverability, safety, and zero-emission performance in pedestrian-heavy areas.
“The GEM Ambulance fills a critical gap in medical response – delivering the ideal balance of agility and safety EMS teams need in crowded settings,” said Byron Dudley, Vice President at Waev Inc.
The new GEM Ambulance is built on the same proven electric platform that has powered GEM vehicles for over 25 years. It’s a highly refined LSV that combines practical engineering with professional-grade EMS functionality. In partnership with emergency equipment supplier QTAC, Waev integrated a skid-mounted EMS system that includes secure patient transport, attendant seating, optional oxygen and IV mounts, and rugged PolyTough™ construction designed to handle demanding conditions.
Unlike golf carts or UTV-based setups that have been DIYed into emergency vehicles, the GEM Ambulance offers a more stable, comfortable, and professional platform. The EMS skid is positioned between the wheels for better weight distribution, and the vehicle’s low deck height and rear step-up provide easy access for patients and personnel alike.
The GEM Ambulance doesn’t skimp on emergency essentials either. It’s equipped with a 360-degree red emergency lighting system, an SAE Class 1-compliant siren with multiple sound patterns, a public address system, turn signals, LED headlights and taillights, and even a pedestrian noise emitter for quiet zones. A backup camera and full 360° sightlines give drivers added confidence when navigating tight environments.
And since it’s 100% electric, there’s no tailpipe emissions to worry about when operating indoors or in crowded spaces. Maintenance is minimal thanks to GEM’s maintenance-free batteries, regenerative braking, and corrosion-resistant aluminum frame. There’s even a seven-year warranty on the lithium-ion battery option.
The biggest surprise might be the price. According to Waev, the GEM Ambulance can cost up to 80% less than a traditional ambulance and 50% less than electric trucks or UTV-based alternatives. Plus, with operating costs of just $0.03 per mile, it promises long-term savings with no fuel, no fluids, and no downtime from engine servicing.
With applications ranging from college campuses and amusement parks to military installations and warehouse sites, the GEM Ambulance could be a game-changer for localized EMS response. It’s available now through GEM’s nationwide dealer network and can also be purchased through government contracts like Sourcewell, Texas BuyBoard, and GSA procurement channels.
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The Kia EV5 is officially heading to North America in early 2026, paving the way for a potential US launch. If so, it could go head-to-head with the Tesla Model Y.
Is Kia launching the EV5 in the US?
On Tuesday, Kia unveiled the new EV5, a global version of its electric SUV that has been sold in China since 2023.
Starting at around $20,000 (149,800 yuan), the EV5 is leading Kia’s comeback in China. It’s also a top-selling EV in Australia, where it’s exported from Kia’s Chinese joint venture, Yueda Kia.
The global version will be made in Korea with a few slight upgrades. For one, it’s powered by an 81.4 kWh nickel-manganese-cobalt (NMC) battery pack, rather than the BYD LFP Blade battery used in the version sold in China.
In Europe, the EV5 will be initially available in two variants: a baseline model and a GT-Line model. Both are powered by front-wheel drive (FWD) with up to 215 hp (160 kW) and 218 lb-ft (295 Nm) of torque.
The global version is 4,610 mm long, 1,875 mm wide, and 1,675 mm tall, or a bit smaller than the Tesla Model Y. It’s about the size of the Hyundai IONIQ 5.
Inside, you’ll find a setup similar to the EV9 and EV3, featuring Kia’s new ccNC (connected car Navigation Cockpit) infotainment system. The setup features a 12.3″ instrument cluster and a 12.3″ infotainment display in a panoramic format. There’s also an added 5.3″ climate control screen.
During the launch event, Kia said the “rollout begins” in Korea and Europe in the second half of 2025, adding North American sales will start in early 2026.
Does that include the US? I wouldn’t get my hopes up. In January, Kia announced the EV5 will be “exclusive to the Canadian market in North America.” It will begin arriving at dealerships in 2026.
However, it might make sense. The EV5 for North America will have a built-in NACS port, unlocking access to Tesla Superchargers. It will be available in both AWD and FWD powertrains. Two battery sizes will be offered, 60.3 kWh and 81.4 kWh, offering a range of up to 310 miles (500 km).
With sales of the EV6 and EV9 slipping nearly 50% each through the first half of the year in the US, the EV5 could complement the two.
Electrek’s Take
Although it’s still unlikely, the EV5 could serve as a potential electric alternative to the Sportage, Kia’s top-selling vehicle in the US.
Through June, Kia has sold over 87,000 Sportage models in the US. In comparison, it’s only sold 4,938 EV9s and 5,875 EV6 models.
Kia is launching the EV4, its first electric sedan, in the US early next year. However, a smaller compact electric SUV may be an even better fit.
It already builds the EV9 and EV6 in Georgia, so it could produce the EV5 in the US to avoid extra tariff costs. Or, it could even potentially be built at Hyundai’s new EV plant in Georgia. However, nothing is confirmed.
Would you buy the Kia EV5 in the US? Prices would likely start at around $50,000. Drop us a comment below and let us know your thoughts.
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