Procurement is the pulse behind the supercycle. Now is the time to lead. Commodity supercycles are among the most impactful yet misunderstood phenomena in global trade. These extended periods of rising prices across a wide array of commodities ripple through economies, reshape supply chains, and alter procurement practices. Explore commodity supercycles in 2025—triggers, trends, and real data—crafted for procurement leaders.
For procurement professionals, understanding these cycles is not just academic—it’s essential. Whether sourcing raw materials for manufacturing, negotiating long-term supplier agreements, or adjusting budgets in volatile times, commodity trends drive daily decisions. In 2025, we find ourselves amid a possibly emerging or ongoing supercycle, spurred by a perfect storm of post-pandemic recovery, geopolitical realignment, decarbonization efforts, and digital industrialization.
In this blog, we walk you through the anatomy of a commodity supercycle, why it matters more than ever, and how procurement leaders can respond with strategic foresight, ethical practices, and resilience. We’ll also hear insights from global procurement strategist Mattias Knutsson, who emphasizes that commodity risk can be converted into strategic advantage.
What Is a Commodity Supercycle?
A commodity supercycle is a long-term trend—typically spanning 10 to 35 years—in which commodity prices rise above historical averages due to broad and sustained shifts in global demand and supply. They differ from shorter business cycles by their scale, duration, and structural implications.
Historical Context:
There have been four recognized supercycles since the late 19th century:
- 1890s–1910s: Driven by the industrialization of Western nations.
- 1930s–1950s: Fueled by post-WWII reconstruction.
- 1970s–1980s: Oil crises and resource nationalism pushed prices up.
- 2000s–2014: China’s rapid industrial expansion led to unprecedented demand for metals and energy.
These supercycles were often preceded by underinvestment in production and infrastructure, followed by a surge in demand. The resulting imbalance triggered prolonged upward pressure on prices.
Current Indicators:
As of 2025, analysts and economists are debating whether we are in the early stages of a new supercycle. Factors contributing to this theory include:
- Rapid growth in renewable energy and electric vehicles.
- Decentralized supply chains post-COVID.
- Russia-Ukraine war disrupting traditional energy flows.
- Strong fiscal stimulus fueling infrastructure projects worldwide.
Are We in a Supercycle in 2025?
The signs are compelling. Let’s look at some commodity-specific trends:
Energy Markets:
- Crude Oil: Prices are stable but elevated, hovering between $75–85/barrel. Global supply constraints from reduced shale investment and OPEC+ discipline are contributing.
- Natural Gas: Volatile due to European supply uncertainty and high LNG demand in Asia.
Metals:
- Copper: Prices reached $5.02/lb in Q2 2025. Copper is central to EVs, wind turbines, and solar energy.
- Lithium: Spiked to over $80,000/ton due to battery demand. Supply growth is lagging.
- Nickel and Cobalt: Essential for batteries, both saw double-digit price increases in 2024 and early 2025.
Agriculture:
- Climate shocks and geopolitical issues (e.g., Ukraine grain export restrictions) have driven up wheat, corn, and soybean prices.
- Food security concerns are escalating in Africa, Latin America, and Southeast Asia.
Precious Metals:
- While gold and silver have lagged compared to industrial commodities, central bank purchases and investor interest in safe havens could catalyze future gains.
These factors point to an evolving structural cycle rather than a temporary spike.
What Commodity Supercycles Means for Procurement Professionals
Supercycles create both risk and opportunity. Here’s how procurement can navigate the landscape:
Budgeting Under Pressure
Price volatility disrupts annual budgeting. Traditional models may no longer apply. Dynamic pricing models and rolling forecasts become crucial.
Contracting with Agility
Fixed-price contracts may lead to loss or supplier failure. Instead, index-linked or floating price contracts help share risk.
Resilient Supplier Networks
Single-source dependencies are risky. Diversification and localization are now key pillars of resilient procurement strategy.
ESG and Ethical Sourcing
With rising prices comes rising scrutiny. Investors, regulators, and customers demand transparent, ethical sourcing, especially for rare and conflict-prone resources like cobalt.
Hedging Strategies
Commodities like aluminum, oil, and wheat can be hedged via futures and options. Partnering with finance teams to explore derivative tools is smart risk management.
Tools and Frameworks for Navigating Commodity Supercycles
Procurement leaders must adopt new frameworks and digital tools to manage volatility:
Spend Analysis with Inflation Indices
Track commodity-linked spend categories and correlate with inflation indices like the S&P GSCI or Bloomberg Commodity Index.
Total Cost of Ownership (TCO) Modeling
Beyond price, model transport, environmental, and labor costs. TCO supports long-term thinking over spot deals.
Category Strategy Refresh
Refresh strategies annually, not every 3–5 years. Focus on risk, opportunity, and supplier leverage shifts.
4.4 Scenario Planning
Develop “low-cost,” “mid-cost,” and “supercycle” scenarios. Use them to simulate supplier behavior and internal cost implications.
Case Studies from 2025
Tesla and Lithium Contracts:
Tesla’s direct deals with mining companies ensure lithium security. In 2023–24, they signed long-term agreements in Australia and Argentina, shielding them from 2025’s lithium shock.
Unilever and Palm Oil:
Palm oil prices surged in early 2024. Unilever responded by funding regenerative agriculture programs in Indonesia, ensuring supply stability and ESG wins.
IKEA and Steel:
IKEA revised its steel contracts to a semi-indexed model in 2024. It avoided 2025’s worst inflation spikes while maintaining supplier relationships.
Conclusion:
Mattias Christian Knutsson, a recognized leader in global procurement and business development, offers a grounded yet visionary take on the 2025 commodity landscape. He reminds us:
“Commodity supercycles should not be feared. They should be anticipated, studied, and integrated into the DNA of strategic sourcing.”
Knutsson highlights the importance of:
- Building supplier partnerships over price-centric negotiations.
- Treating procurement as a strategic value chain driver, not a cost function.
- Aligning sourcing with long-term business and sustainability goals.
He argues that procurement leaders must now evolve into risk strategists, scenario planners, and ESG champions. The commodity supercycle is not a wave to surf passively—it’s a current to navigate purposefully.
In 2025, we may be standing at the edge—or in the midst—of a global commodity supercycle. For procurement professionals, this isn’t just a macroeconomic curiosity. It’s a central theme that will define your strategies, shape your contracts, and test your resilience.
By combining traditional fundamentals with modern tools and a deep ethical compass, today’s procurement leaders can transform risk into advantage, volatility into vision. And with thought leaders like Mattias Knutsson showing the way, procurement is no longer reactive—it’s redefining global business resilience.
