Arion’s Heavy Metal 2021– Commodities in Charts


In this commodity wrap we decided to let charts do the talking – looking back at last year’s moves as well as the likely major factors influencing the sector over the year coming.

  • 2020 returns
  • Fiscal Stimulus / Infrastructure Spend
  • Inflation
  • Weaker USD
  • Commodities relative to other asset classes

Commodities performance in 2020

Winners & Losers

  • Chart shows big rally from Q32020
  • Large underperformance of index funds driven by overweight exposure to oil (BCOM 30% / GSCI +60%)

Fiscal Stimulus / Infrastructure Spend

“The government should pay people to dig holes in the ground and then fill them up.” – John Maynard Keynes

Country Allocated Infrastructure Spend Focus
USA $2tn Build back better scheme - clean energy & infrastructure plan
China $1tn Belt & Road initiative - the worlds largest infrastucture project
China $2tn New infrastucture project - focused on 5G & AI
UK £600bn £100bn over 2021 / £600bn over next 4 years
EU €750bn Green New Deal project - green infrastructure
Indonesia $412bn Focused on infrastructure decentralisation, running to 2024

  • According to Fitch Solutions, Global construction industry real growth will reach 4.1% y-o-y during 2021, the fastest annual growth rate seen in over 20 years, following a historic fall of -2.5% y-o-y during 2020.  They expect the global construction industry value in 2021 to stand at a considerable $5.0tn
  • Infrastructure project financing was down about 75% from 2019 due to the Covid pandemic. When combined with the macro environment post-covid, pent-up demand could mean the pandemic was a ‘black-swan’ moment for a protracted infrastructure boon


  • US 5, 10 & 30 year breakeven inflation rates have all surpassed May 2019 highs and are on course to continue the push after Fed chair, Jerome Powell, announced last summer that the central bank would allow periods of higher inflation

A weaker USD 

Asset Allocation…commodities cheap?


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About Arion: Arion is a commodity focused investment adviser and manager with offices in London. Arion is authorised and regulated by the FCA (registered no. 742037), is registered with the U.S. Commodity Futures Trading Commission (CFTC) as a Commodity Pool Operator and Commodity Trading Advisor and is member of the National Futures Association (NFA).