Making sense of the chaos in commodity markets

THE WORLD championships of slot-car racing are a microcosm of mayhem. Tiny remote-controlled models of cars fly up, down and off a convoluted circuit faster than befuddled spectators can follow. Forecasting winners is impossible. This year’s race, due to be held in America, was cancelled owing to travel restrictions. But amateurs of high-risk betting might instead find consolation in the equally bewildering, rapidly changing world of commodities.Until recently these seemed comfortably installed in the fast lane; the Dow Jones Commodity Index rose by about 70% in the year to June. But the rally has since run out of puff. Some materials, such as lithium, continue to climb. Other once-hot commodities have gone into reverse. The price of iron ore is down by 45% since its peak in mid-July; lumber, by 63% since early May.