The boom in mineral markets: How long might it last?. http://dx.doi.org/10.1016/j.resourpol.2008.05.002

Abstract

The commodity price boom that emerged in 2004 has proved far more persevering than its predecessors of 1950 and 1973. Some analysts have suggested that it may represent the start of a “supercycle” caused by the voracious raw materials demand from China and other emerging economies, with prices remaining high for 20-30 years. We offer an alternative explanation. For a variety of reasons, the establishment of new capacity in minerals and energy to match the accelerated demand trends is more time consuming than commonly assumed, and may take a decade or longer. As soon as the new capacity is in place, however, the boom will be punctuated. Prices may collapse much earlier in the event of a severe recession that cuts the growth in commodity demand.
In a recent article Radetzki (2006) explains the three post-World War II commodity booms of the early 1950s, the early to middle 1970s, and 2003 onwards, by strong surges in global demand. He finds that the first two booms were of short duration (about 2 years) and ended abruptly because of macroeconomic policies in the major consuming countries undertaken to curb inflation. In both cases these policies turned a rapid global expansion into a worldwide recession, which in turn led to destocking, stagnant or falling commodity demand, and declining prices.