“We believe the clean technology transition is igniting a new supercycle in critical commodities, with natural resource companies emerging as winners.” – J.P. Morgan – On resources
When J.P. Morgan Asset Management framed the clean technology transition in these terms, it captured a profound shift underway at the intersection of climate policy, industrial strategy and global capital allocation.1,5 The quote stands at the heart of their analysis of how decarbonisation is reshaping demand for metals, minerals and energy, and why this is likely to support elevated commodity prices for years rather than months.1
The immediate context is the rapid acceleration of the energy transition. Governments have committed to net zero pathways, corporates face growing regulatory and investor pressure to decarbonise, and consumers are adopting electric vehicles and clean technologies at scale. J.P. Morgan argues that this is not merely an environmental story, but an economic retooling comparable in scale to previous industrial revolutions.1,4
Their research highlights two linked dynamics. First, the decarbonised economy is less fuel-intensive but far more materials-intensive. Replacing fossil fuel power with renewables requires vast quantities of copper, aluminium, nickel, lithium, cobalt, manganese and graphite to build solar and wind farms, grids and storage systems.1 Second, the speed of this transition matters as much as its direction. Even under conservative scenarios, J.P. Morgan estimates substantial increases in demand for critical minerals by 2030; under more ambitious net zero pathways, demand could rise by around 110% over that period, on top of the 50% increase already seen in the previous decade.1
In this framing, natural resource companies – particularly miners and producers of critical minerals – shift from being perceived purely as part of the old carbon-heavy economy to being central enablers of clean technologies. J.P. Morgan points out that while fossil fuel demand will decline over time, the scale of required investment in metals and minerals, as well as transmission infrastructure, effectively re-ranks many resource businesses as strategic assets for the low-carbon future.1 Valuations that once reflected cyclical, late-stage industries may therefore underestimate the structural demand embedded in net zero commitments.
The quote also reflects J.P. Morgan’s broader thinking on commodity and energy supercycles. Their research on energy markets describes a supercycle as a sustained period of elevated prices driven by structural forces that can last for a decade or more.3,4 In previous eras, those forces included post-war reconstruction and the rise of China as the world’s industrial powerhouse. Today, they see the combination of chronic underinvestment in supply, intensifying climate policy, and rising demand for both traditional and clean energy as setting the stage for a new, complex supercycle.2,3,4
Within the firm, analysts have argued that higher-for-longer interest rates raise the cost of debt and equity for energy producers, reinforcing supply discipline and pushing up the marginal cost of production.3 At the same time, the rapid build-out of renewables is constrained by supply chain, infrastructure and key materials bottlenecks, meaning that legacy fuels still play a significant role even as capital increasingly flows towards clean technologies.3 This dual dynamic – structural demand for critical minerals on the one hand and a constrained, more disciplined fossil fuel sector on the other – underpins the conviction that a supercycle is forming across parts of the commodity complex.
The idea of commodity supercycles predates the current climate transition and has been shaped by several generations of theorists and empirical researchers. In the mid-20th century, economists such as Raúl Prebisch and Hans Singer first highlighted the long-term terms-of-trade challenges faced by commodity exporters, noting that prices for primary products tended to fall relative to manufactured goods over time. Their work prompted an early focus on structural forces in commodity markets, although it emphasised long-run decline rather than extended booms.
Later, analysts began to examine multi-decade patterns of rising and falling prices. Structural models of commodity prices observed that at major stages of economic development – such as the agricultural and industrial revolutions – commodity intensity tends to increase markedly, creating conditions for supercycles.4 These models distinguish between business cycles of a few years, investment cycles spanning roughly a decade, and longer supercycle components that can extend beyond 20 years.4 The supercycle lens gained prominence as researchers studied the commodity surge associated with China’s breakneck urbanisation and industrialisation from the late 1990s to the late 2000s.
That China-driven episode became the archetype of a modern commodity supercycle: a powerful, sustained demand shock focused on energy, metals and bulk materials, amplified by long supply lead times and capital expenditure cycles. J.P. Morgan and other institutions have documented how this supercycle drove a 12-year uptrend in prices, culminating before the global financial crisis, followed by a comparably long down-cycle as supply eventually caught up and Chinese growth shifted to a less resource-intensive model.2,4
Academic and market theorists have since refined the concept. They argue that supercycles emerge when three elements coincide. First, there must be a structural, synchronised increase in demand, often tied to a global development episode or technological shift. Second, supply in key commodities must be constrained by geology, capital discipline, regulation or long project lead times. Third, macro-financial conditions – including real interest rates, inflation expectations and currency trends – must align to support investment flows into real assets. The question for today’s transition is whether decarbonisation meets these criteria.
On the demand side, the clean tech revolution clearly resembles previous development stages in its resource intensity. J.P. Morgan notes that electric vehicles require significantly more minerals than internal combustion engine cars – roughly six times as much in aggregate when accounting for lithium, nickel, cobalt, manganese and graphite.1 Similarly, building solar and wind capacity, and the vast grid infrastructure to connect them, calls for much more copper and aluminium per unit of capacity than conventional power systems.1 The International Energy Agency’s projections, which J.P. Morgan draws on, indicate that even under modest policy assumptions, renewable electricity capacity is set to increase by around 50% by 2030, with more ambitious net zero scenarios implying far steeper growth.1
Supply, however, has been shaped by a decade of caution. After the last supercycle ended, many mining and energy companies cut back capital expenditure, streamlined balance sheets and prioritised shareholder returns. Regulatory processes for new mines lengthened, environmental permitting became more stringent, and social expectations around land use and community impacts increased. The result is that bringing new supplies of copper, nickel or lithium online can take many years and substantial capital, creating a lag between price signals and physical supply.
Theorists of the investment cycle – often identified with work on 8 to 20-year intermediate commodity cycles – argue that such periods of underinvestment sow the seeds for the next up-cycle.4 When demand resurges due to a structural driver, constrained supply leads to persistent price pressures until investment, technology and substitution can rebalance the market. In the case of the energy transition, the requirement for large amounts of specific minerals, combined with concentrated supply in a small number of countries, intensifies this effect and introduces geopolitical considerations.
Another important strand of thought concerns the evolution of energy systems themselves. Analysts focusing on energy supercycles emphasise that transitions historically unfold over multiple decades and rarely proceed smoothly.3,4 Even as clean energy capacity expands rapidly, global energy demand continues to grow, and existing systems must meet rising consumption while new infrastructure is built. J.P. Morgan’s energy research describes this as a multi-decade process of “generating and distributing the joules” required to both satisfy demand and progressively decarbonise.3 During this period, traditional energy sources often remain critical, creating complex price dynamics across oil, gas, coal and renewables-linked commodities.
Within this broader theoretical frame, the clean technology transition can be seen as a distinctive supercycle candidate. Unlike the China wave, which centred on industrialisation and urbanisation within one country, the net zero agenda is globally coordinated and policy-driven. It spans power generation, transport, buildings, industry and agriculture, and requires both new physical assets and digital infrastructure. Structural models referenced by J.P. Morgan note that such system-wide investment programmes have historically been associated with sustained periods of elevated commodity intensity.4
At the same time, there is active debate among economists and market strategists about the durability and breadth of any new supercycle. Some caution that efficiency gains, recycling and substitution could cap demand growth in certain minerals over time. Others point to innovation in battery chemistries, alternative materials and manufacturing methods that may reduce reliance on some critical inputs. Still others argue that policy uncertainty and potential fragmentation in global trade could disrupt smooth investment and demand trajectories. Theorists of supercycles emphasise that these are not immutable laws but emergent patterns that can be shaped by technology, politics and finance.
J.P. Morgan’s perspective in the quoted insight acknowledges these uncertainties while underscoring the asymmetry in the coming decade. Even in conservative scenarios, their work suggests that demand for critical minerals rises substantially relative to recent history.1 Under more ambitious climate policies, the increase is far greater, and tightness in markets such as copper, nickel, cobalt and lithium appears likely, especially towards the end of the 2020s.1 Against this backdrop, natural resource companies with high-quality assets, disciplined capital allocation and credible sustainability strategies are positioned not as relics of the past, but as essential partners in delivering the energy transition.
This reframing has important implications for investors and corporates alike. For investors, it suggests that the traditional division between “old” resource-heavy industries and “new” clean tech sectors is too simplistic. The hardware of decarbonisation – from EV batteries and charging networks to grid-scale storage, wind turbines and solar farms – depends on a complex upstream ecosystem of miners, processors and materials specialists. For corporates, it highlights the strategic premium on securing access to critical inputs, managing long-term supply contracts, and integrating sustainability into resource development.
The quote from J.P. Morgan thus sits at the confluence of three intellectual streams: long-run theories of commodity supercycles, modern analysis of energy transition dynamics, and evolving views of how natural resource businesses fit into a low-carbon world. It encapsulates the idea that the path to net zero is not dematerialised; instead, it is anchored in physical assets, industrial capabilities and supply chains that must be financed, built and operated over many years. For those able to navigate this terrain – and for the theorists tracing its contours – the clean technology transition is not only an environmental imperative but also a defining economic narrative of the coming decades.
References
2. https://www.foxbusiness.com/markets/biden-climate-change-fight-commodities-supercycle
3. https://www.jpmorgan.com/insights/global-research/commodities/energy-supercycle
6. https://www.jpmorgan.com/insights/global-research/outlook/market-outlook
