Commodity prices will remain high for longer than anticipated as supply concerns, energy costs and scarcity of skilled miners buoy prices, a fund manager said.
"A slower-than-expected supply response and a greater-than-expected aggregate offtake of commodities from the industrialising economies are the keys to the surprise factor," said Adam Dixon, associate director at Ausbil Dexia Ltd.
Ausbil Dexia is an Australian company, with Brussels-based Dexia Asset Management being its joint venture partner. The company manages about A$11 billion ($9 billion), with mining and energy sectors accounting for one-third of its total funds. Several commodities, including nickel, tin, platinum, lead, oil and wheat, hit record highs this year. Other key commodities also substantially gained this year.
"We will continue to witness volatility but the trend appears to be clearly in place," Dixon told Reuters. "Key suppliers are finding themselves constrained in terms of their ability to find, plan, develop, construct, commission and ramp up new projects of the scale required to satisfy the needs of these key emerging markets of Asia," he said.
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