Commodities Will Have ‘Difficult’ Year, Van Eck’s Malan Says

Commodities may trail last year’s performance as China’s move to curb bank lending reduces demand, said Charl Malan, who helps manage $2.3 billion at Van Eck Global Hard Assets Fund.

“We shouldn’t anticipate 2010 to look like 2009,” Malan said today in a telephone interview from New York. “It’s more of a difficult time for commodities for the next quarter or two.”

The Reuters/Jefferies CRB Index of 19 raw materials jumped 23 percent in 2009, the biggest annual gain in 30 years, as economic growth rebounded. Last year’s advance was “unique,” Malan said. Returns will be limited in 2010 as production increases to meet demand, he said.

The CRB index has fallen for two straight weeks as regulators in China took steps to limit credit growth in a bid to keep the world’s fastest-growing major economy from overheating. The gauge is down 3 percent this year.

“Short term, it’s probably too early to get involved in the commodity complex,” Malan said. “Longer term, it continues to be very constructive as the balance between supply and demand remains very tight.”

Commodity demand may rebound as manufacturers ramp up production after the Lunar New Year in February, Malan said.

By Millie Munshi and Yi Tian
Bloomberg