While the overall stock market has had a weak start to the year on concerns over multi-decade high inflation and the possibility of aggressive interest rate hikes by the Federal Reserve, mining stocks have displayed significant strength. Since the beginning of the year, prices of commodities have soared due to persistent supply disruptions amid rising demand, with economies trying to return to the pre-pandemic levels of production.
Amid a demand-supply mismatch, commodities prices are expected to remain strong in 2022. Moreover, the ongoing war between Ukraine and Russia may cause a supply shortage of crucial metals, further increasing prices. In addition, The Infrastructure Investment and Jobs Act focuses on improving the country’s creaking infrastructure and will increase the demand for steel, aluminum, copper, and other metals, thereby benefiting the mining industry.
