HSBC Warns of Commodity 'Super-Squeeze' and Hikes 2026 Price Forecasts

Key Facts

1London copper futures are trading above $14,700 a ton, while Brent crude has climbed above $101 a barrel.

2The Bloomberg Commodity Index has reached a 14-year high driven by tightening physical supplies.

3HSBC raised its average commodity price increase forecast for 2026 to 22%, up from a previous 16%.

Reflecting a significant shift in global raw material dynamics, HSBC has warned of a 'super-squeeze' in commodity markets driven by acute physical supply shortages. According to reports, the bank raised its average commodity price increase forecast for 2026 to 22%, up from its previous estimate of 16%. This revision comes as London copper futures trade above $14,700 a ton and Brent crude climbs past the $101 per barrel mark, pushing the Bloomberg Commodity Index to its highest level in 14 years.

The price surge is attributed to a combination of geopolitical conflicts and climate-related disruptions, with the Russia-Ukraine and Middle East wars alongside El Niño impacting global supplies. Per analyst data, rising demand from AI infrastructure and electrification is clashing with a physical supply deficit. While the global commodity price index is up 18% year-to-date, the rapid drawdown of inventories has so far prevented the most severe supply-side shocks from fully materializing.

Looking ahead, market participants are monitoring industrial demand and trade balances for signs of further tightening. According to market data from September 3, 2026, the US Balance of Trade showed a deficit of $88.6 billion, while ISM Non-Manufacturing Prices reached a high of 72.6, indicating sustained price pressure. Future catalysts to watch include industrial production reports and upcoming energy sector meetings to gauge whether supply can keep pace with these revised price targets.