Hitting rock bottom doesn’t mean things are improving

Outlook

Ivan Glasenberg’s stake in Glencore is now worth less than £1bn, compared to about £6bn when the company was floated (EPA)

Believe it or not, some investors are starting to feel more confident about commodities prices. And it’s not just Ivan Glasenberg, the Glencore boss who tells anyone listening that “fundamentals” make a rebound in copper prices inevitable.

A note from small company stockbroker VSA Capital drew a link between investors buying bombed-out temporary power firm APR this week, Balfour Beatty snapping up similarly subdued Alkane and Aggreko’s recent share price bounce.

VSA suggests these are all plays on power, energy and, by association, commodity prices. It asks: are we at the bottom of the commodity/energy cycle?

Hmm. At the bottom, possibly, but that doesn’t mean we’re on our way up. Given the state of the Chinese and European economies (the real “fundamentals”), it seems far more likely we’ll be grinding along at these low levels for a long time yet.

One thing’s for sure: the banks including Standard Chartered and Lloyds who have $5bn (£3bn) out on loan to commodities traders like Glencore will be hoping I’m wrong.