Six Steps to Protecting Profits When Commodity Prices Spike

Several factors, including a long-term surge in demand for commodities, are causing a possible “commodity supercycle”, putting margins under pressure. Industry expert Kiran Pudi identifies some potential reasons for a supercycle, and recommends steps to adjust prices with the right mix of urgency, clarity, and decisiveness.

The current global price rally in commodities is fueling fears that a new supercycle has started – a phase when prices of several commodities simultaneously remain above their long-term trends.

A supercycle will threaten the margins of all downstream industries, including chemicals. However, companies can weather this storm if they manage their prices strategically.

Is there really a commodity supercycle?

Prices of iron ore, copper, aluminum, lithium, timber, and other commodities have all hit their peaks for the last five to eight years. All the leading KPIs, such as the S&P GSCI index,…