Materials and Commodity CostsCommodity prices could be set for a major rise in the fourth quarter of 2010 that could last through 2012, reports the Financial Times.

According to Michael Shillaker, a metals and mining analyst at Credit Suisse, the rise could last two years or more and is likely to push mining shares higher. Evidence indicating that the Chinese economy has bottomed out could be the catalyst to drive commodity prices higher - similar to the improved performance of mining shares seen in 2001, 2005, 2007 and 2009.

Shillaker added that a rebound in China's economy in 2012 would likely be followed by growth acceleration and demand normalization in the rest of the world. As a result, commodities markets should remain structurally tight and prices high even after normalization.

Commodities including iron ore - a key component of steel manufacturing that is used in everything from motor vehicles to corporate structures - and coal - found in many medications such as aspirin and a major source of fuel - could breach all-time highs. In particular, copper, which is used in many electronics as a conductor, could see major gains.

"We still think that copper will reach $10,000 a tonne by 2012 and relatively simple supply-demand analysis supports this," Shalliker told the Times.
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