Goldman points to commodities super-cycle: Which ASX mining shares will benefit?

Commodity prices have pushed higher after hitting multi year lows in April last year. Here are the ASX mining shares that can benefit.

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The long-suffering commodity markets may have turned a corner after a China-fuelled commodity boom. The gains come amid calls by Goldman Sachs of a new long-term bull market propped by ultra low interest rates, supply constraints and a weak US dollar. 

Here are the ASX mining shares that are set to benefit from higher commodity prices. 

A wild year it was for commodities 

2020 was a wild year for commodities, as it was for other assets in a world ravaged by COVID-19. In an event like no other, oil prices crashed in April, falling into negative territory for the first time ever. 

But it wasn't just oil, the Bloomberg Commodity Index, which tracks 23 commodity futures markets hit an all-time low in April 2020 based on data that goes back to 1991.

The index has since bounced more than 30% from its lows but is still in multi-year low territory.

Which ASX mining shares will benefit?

Iron ore 

Iron ore has extended its gains to a 7-year high of US$166 per tonne. The Australian government sees iron ore prices to remain strong, above US$100 per tonne until mid-2021, before easing gradually to around US$75 by the end of 2020 as Brazilian supply recovers and Chinese stimulus eases back. 

Higher iron ore prices will support the BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) share prices which are all sitting in record territory. 

Copper 

Last month, copper topped $8,000 a tonne for the first time in more than 7 years. This has seen the OZ Minerals Limited (ASX: OZL) share price almost double in 2020 and the depressed Sandfire Resources Ltd (ASX: SFR) share price up 25% in the last two months. 

Crude oil

Crude oil made a significant recovery before the end of the year, rallying from the US$40 level in November to US$50 by December. Following the bullish price action, the S&P/ASX 200 Energy (ASX: XEJ) index rallied 30% during the same time period. 

Aluminium 

Aluminium prices have moved up to a 2-year high thanks to improved demand from China and the United States. This has helped the South32 Ltd (ASX: S32) and Alumina Limited (ASX: AWC) share prices push higher throughout November and December. 

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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