What evidence led HSBC to declare that global commodities have entered a prolonged “super bull market” or “super bull” phase, how do its COCCLES model and market indicators—including copper above $14,700 per ton and the Bloomberg Commodity Index at a 14 year high—support that ass

HSBC’s case is a “super-squeeze”: overlapping supply shocks are meeting structurally stronger demand while usable inventories are thin. Its COCCLES statistical cycle model reportedly classifies the market as in a super-bull phase, but that is a model signal—not proof that a long supercycle is assured. 49

What supports HSBC’s call

• Broad, not isolated, price strength: LME copper traded above $14,700 per metric ton on September 9, after reaching successive records amid tight near-term supply and anticipated U.S. refined-copper tariffs. 54 Reporting on HSBC’s note also put Brent above $100 per barrel and the Bloomberg Commodity Index at a 14-year high—evidence that the pressure spans energy and metals rather than a single commodity. 8

• COCCLES: HSBC describes COCCLES as a statistical/machine-learning commodity-cycle tool that detects patterns in commodity-price data. HSBC had earlier characterized its output as an increasing probability of a shift from “weak bull” to “super-bull”; the latest reported reading says the super-bull phase is under way. 94 It should be read as corroboration from price behavior, not as a causal forecast model of wars, weather, mine supply, or demand.

• Supply shocks reinforce one another: HSBC’s thesis is that the Iran war and an effectively closed Hormuz, attacks affecting the Red Sea/Bab el-Mandeb route, and Russia-Ukraine/Black Sea disruptions impede energy and bulk-commodity transport. A prolonged Hormuz closure is especially consequential because it converts a shipping disruption into physical shortages as stocks are consumed. 12

• Transmission across commodities: Costlier or unavailable crude, gas, diesel and freight raise mining, smelting, transport and farm costs. Disruptions can therefore spread from oil and LNG into refined products, metals such as aluminium, fertilizer feedstocks and sulfur, and grain supply chains. El Niño-related weather extremes add crop-yield and logistics risk. HSBC explicitly attributes its elevated-price view to the Iran and Russia-Ukraine wars, El Niño, and AI/electrification demand. 34

Why inventories make the market fragile

• Inventory is the shock absorber. When commercial stocks, strategic releases, and gas storage are being drawn down, buyers cannot readily substitute stored material for interrupted flows; they must bid for scarce prompt supply. That is why HSBC warned of market “tipping points” if Hormuz stayed shut. 12

• The reported HSBC discussion points to limited ability to keep offsetting disruptions through U.S. strategic-petroleum releases and constrained European gas inventories. The central risk is nonlinear: prices may remain manageable while inventories exist, then rise sharply once the remaining operational buffer is inadequate. 8

• The specific descriptions “tank-bottom” for the U.S. SPR and “below-target” European gas storage should be treated cautiously. I could not independently verify those precise levels from a primary U.S. or European inventory release in the available evidence.

Why demand is structural rather than merely cyclical

• AI data centres require power generation, grid equipment, cooling and transmission. Electrification, EVs, renewables, and grid expansion are similarly materials-intensive, especially for copper and aluminium. HSBC identifies AI and the energy transition as major supports for energy and metals demand. 34

• Copper is particularly exposed because new mines and processing capacity take years to permit and build. Thus, chronic underinvestment or project delays can make even moderate demand surprises produce large price movements; the contemporaneous record price reflected tight supply as well as tariff expectations. 4

• In agriculture, higher diesel, fertilizer, freight and financing costs raise producers’ marginal costs. That increases the chance that a weather or logistics shock becomes food-price inflation rather than being absorbed by farm margins.

Forecast change: an important qualification

HSBC reportedly raised its 2026 average commodity-price-growth forecast from 16% to 22%, reflecting persistent supply disruption and stronger-than-assumed demand. 3

However, the accessible report says its 2027 forecast changed from a 7% decline to flat—an uplift of 7 percentage points, not 14. 3 I therefore cannot verify the premise that HSBC lifted the 2027 projection by 14 percentage points; it may refer to a different forecast vintage or measure.

Economic and market implications

• Inflation: Higher energy, freight, fertilizer and food inputs can rekindle headline inflation and eventually pass into core inflation through transport, utilities and manufactured goods. This would complicate central-bank easing. The degree of pass-through depends on demand conditions, exchange rates and government subsidies.

• Oil: If Hormuz restrictions persist and inventories continue falling, the main risk is an upside tail rather than a stable $100 oil market—physical availability, insurance, shipping and refinery bottlenecks can create temporary price spikes. 12

• Equities: Producers of energy, metals, mining equipment and some fertilizer inputs may benefit from higher realized prices. Conversely, airlines, transport, chemicals, consumer companies and other energy-intensive sectors face margin pressure; higher inflation and interest-rate expectations can also weigh on broad equity valuations.

• Global economy: Commodity exporters may gain terms-of-trade income, while import-dependent economies face weaker real household incomes, larger trade deficits and fiscal pressure. The adverse global scenario is stagflation: slower output growth coupled with elevated inflation, rather than a uniformly bullish outcome for stocks or economic activity.