We think that the widespread rallies in commodity prices from their pandemic-induced lows are now close to, or in some cases already past, their peak. Most notably, we anticipate that Q3 will be as good as it gets for the oil price, and that it will start to ease back by the end of the year as OPEC+ continue to unwind their collective output cut and demand growth slows. Meanwhile, the rally in industrial metals prices already seems to have fizzled out, and we think this will soon give way to a protracted decline in prices as economic growth in China disappoints over the next couple of years.
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