The HC Commodities Podcast

Episode: "The Big Picture" with David Fyfe

Host: Paul Chapman (HC Group)
Guest: David Fyfe (Chief Economist, Argus Media)
Date: December 17, 2025

Episode Overview

In this episode, host Paul Chapman sits down with David Fyfe, Chief Economist at Argus Media, to dissect the most consequential stories and trends that have shaped commodity markets throughout 2025 and look ahead to 2026. Their wide-ranging discussion covers tariffs and US trade policy, the macroeconomic landscape shaped by AI and deficits, regional economic outlooks (US, Europe, China), and deep dives into key commodity narratives—oil, LNG/natural gas, and metals (especially copper). The tone is insightful yet straightforward, with an emphasis on actionable intelligence for professionals and observers of energy and commodity markets.

Key Discussion Points & Insights

1. US Tariffs & Trade Policy: Impact and Repercussions

• Tariffs as a Major Risk Factor: The episode opens with a thorough assessment of the Trump administration’s aggressive tariff regime, which peaked at nearly 30% on average in early 2025. Thereafter, the US adopted a more transactional approach, rowing back or deferring key tariffs, especially when inflationary effects—particularly on food and essentials—sparked political backlash. ([01:59])
  • Quote (David Fyfe): "Early on in April and all the way to early May, we were looking at average effective US tariffs of not far short of 30%... The worst of the threatened tariffs has actually been either deferred or... they've stepped back altogether." ([01:59])
• Tariff Objectives: Fyfe dissects the motivations behind tariffs—re-industrialization, budget balancing, and leverage in trade negotiations, concluding that the latter was the most significant this year, with Trump’s team eager to strike deals. ([01:59])
• Initial Economic Fears & Emerging Realities: Despite widespread concern—e.g., WTO predicting trade contraction—the world saw global trade revised up to 2.5% growth, with timely indicators suggesting as much as 4%. However, the hosts warn of lagged inflationary impacts and persistent risk premiums that act as a drag on long-term growth and increase volatility. ([07:18], [08:14])
  • Quote (Paul Chapman): "The damage is done in introducing a new risk to the market... suppliers have been put out of business or have had terrible years... the risk premium now required to do any kind of trade..." ([07:18])

2. Macroeconomic Picture: AI Bubble and Fiscal Risks

• AI and the Market: US economic strength in 2025 surprised many, but it has been highly uneven—driven almost entirely by AI-fueled "Magnificent Seven" stocks. The episode repeatedly questions the sustainability of this rally. ([09:25])
  • Quote (Paul Chapman): "If you've got assets, you're doing well. If you don't, you're having a shocker." ([13:19])
• Asset Bubbles & Tail Risks: Despite resilience in US equities and the dollar, softening consumer spending and historically overvalued stocks are highlighted as tail risks. Chapman and Fyfe both remark on the “K-shaped” economy, where wealth divides widen. ([13:19]-[14:07])
• Interest Rates & Inflation Outlook: With tariffs expected to be inflationary, Fyfe forecasts a cautious Fed unlikely to drop rates rapidly, which might put a floor under the dollar, but overall macro risks—deficit, possible AI bubble burst—persist into 2026. ([10:26])

3. Regional Outlooks: US, Europe, China, and Russia

• Europe: Described as "the economic laggard," Europe faces post-pandemic/bulk energy shock malaise, productivity stagnation, age-driven fiscal stress, and deindustrialization. Fyfe signals 1% or lower GDP growth, significant energy policy tension (hydrocarbons vs renewables), and the structural dilemma of Russian supply. ([17:15])
  • Quote (Fyfe): "Europe is still grappling with the aftermath of 2022 and the surge in energy prices... deindustrialization is the watchword at the moment." ([17:15])
• China: Domestic demand is weak, real estate overhang persists, and deflationary pressures are rising. Nevertheless, exports outside the US remain strong (up 10-15%), but risks of global pushback over EV market flooding and ‘exporting deflation’ are growing. Chinese commodity imports (notably oil and copper) remain robust, driven more by strategic stockpiling and government policy than pure economic demand. ([25:11]-[33:04])
  • Quote (Fyfe): "There is a sort of disconnect from real world economics... in the name of social stability, which above all else is the must-have for the authorities in Beijing." ([34:19])
• Russia: Russian economy is slowing significantly; military spending is crowding out civilian sectors. Oil revenues sharply down. Prolonged stalemate in Ukraine prolongs uncertainties for regional supply. ([22:36])

4. Commodities in Focus

a) OPEC, Oil Supply & Price Dynamics

• Supply Glut Looms: With OPEC+ unwinding cuts, non-OPEC (especially Brazil, Guyana, Canada) adding 1.5m bpd, Argus forecasts up to a 2m bpd market surplus unless OPEC recuts—an unlikely long-term situation due to OPEC’s fiscal needs. ([36:47])
  • Quote (Fyfe): "Our view here is that although they may be prepared to spook the market and allow prices to fall for a brief period... they will ultimately stitch together a new deal." ([39:06])
• Potential for Short-term Price War: There’s open debate whether Saudi Arabia might finally force discipline by allowing prices to plummet—but Fyfe believes precedent and fiscal realities will force renewed production restraint. ([39:00])
• Longer-term Non-OPEC Concerns: Exploration spend collapse is flagged as a real threat post-2028, possibly causing a reversal and enabling OPEC to regain market share. ([43:49])

b) Natural Gas & LNG

• US-centric Growth: Massive LNG capacity expansion (7-8% a year through 2027), dominated by the US Gulf Coast, is softening prices and is timely for Europe as it phases out Russian flows. Still, surplus will likely pressure prices, especially if AI-data center growth falters. ([47:20])
  • Quote (Fyfe): "Unlike in oil, we don't have an OPEC... so really, the only way you see surplus... is via the mechanism of price." ([47:20])
• Global Divergence: Henry Hub might see support if AI/data center demand holds; globally, however, price-sensitive Asia will restrict upside, and mild winters plus cheap coal are weighing on demand. ([50:17], [51:14])

c) Copper (and Broader Metals)

• Electrification & Grid Expansion: Copper remains the standout “star” for 2026 due to underinvestment in supply versus unrelenting structural demand (EVs, grid, renewables, storage). Supply disruptions and underinvestment exacerbate bullish biases, even with macroeconomic headwinds. ([54:05])
  • Quote (Fyfe): "We need sort of 65% more copper than we're currently producing worldwide over the next decade or so… And we simply are not seeing the investment in new mine capacity..." ([57:22])
• Metals Trading Renaissance: 2025 saw strong years for metals traders, with copper in particular returning to center stage—yet prices, inflation-adjusted, are still a step down from old supercycle highs. ([56:15]-[57:22])

d) Freight as a Silent Driver

• Rising & Volatile Freight Costs: Often overlooked, the volatility and elevated share of freight in delivered commodity prices have become a crucial part of arbitrage and risk for both physical traders and market analysts. Fyfe expects this to persist into 2026, possibly intensifying. ([59:24])
  • Quote (Fyfe): "The share of freight in delivered commodity prices has obviously gone way up... it's going to remain an elevated part of the overall equation and a very volatile part of the equation going forward." ([59:24])

Notable Quotes & Memorable Moments

• On US Tariffs as Market Risk:
  “The damage is done in introducing a new risk to the market... the risk premium now required to do any kind of trade and the kind of that disruption of the ever marching sort of free market.”
  — Paul Chapman ([07:18])

• On the Artificial Intelligence-driven Economy:
  “Without AI, it would be a very different picture; that sort of OpenAI money is sloshing around a few companies... there's a lot riding on this one or two stories which seems relatively fragile compared to a much broader economic wave.”
  — Paul Chapman ([14:07])

• On China’s Managed Economy:
  "There is a sort of disconnect from real world economics... in the name of social stability, which above all else is the must-have for the authorities in Beijing."
  — David Fyfe ([34:19])

• On OPEC’s Limits:
  “OPEC... is like a teabag. It only properly works when it's in very, very hot water. Well, 2026 begins to look like very hot water for OPEC.”
  — David Fyfe ([39:06])

• On Copper and the Energy Transition:
  "We need sort of 65% more copper than we're currently producing worldwide over the next decade... we simply are not seeing the investment in new mine capacity at the moment that would even get us... to a halfway point."
  — David Fyfe ([57:22])

• On Freight Costs:
  “The share of freight in delivered commodity prices has obviously gone way up... everything that we see happening in 2026 says that freight is going to remain an elevated part of the overall equation and a very volatile part of the equation going forward.”
  — David Fyfe ([59:24])

Timestamps of Critical Segments

• Tariffs & Trade: Opening Discussion — [01:03]–[09:25]
• US Macroeconomics, AI Bubble, and Asset Markets — [09:25]–[15:37]
• Europe’s Outlook & Energy Dilemmas — [16:46]–[22:36]
• Russia’s Economic Grind & Conflict — [22:36]–[24:18]
• China: Demand, Exports, Commodities — [25:11]–[36:00]
• OPEC and Oil Supply/Demand in 2026 — [36:47]–[46:15]
• Non-OPEC Supply Gap & Exploration — [43:49]–[46:15]
• Natural Gas & LNG Oversupply — [47:20]–[52:20]
• Copper/Metals, Electrification Narrative — [52:20]–[58:45]
• Freight Costs Volatility & Conclusion — [59:24]–[61:38]

Summary Takeaways

• Tariffs matter—and their risk premium may linger long after headlines fade, supporting volatility for commodity traders but acting as a drag on real economic growth.
• AI’s outsized influence on US markets is a sword of Damocles: if the narrative cracks, expect swift and broad repercussions for commodities, especially in energy where the data center demand boom is a core thesis.
• Europe is in a rut, China is strategically resilient if opaque, and Russia’s war economy is slowing with oil revenue declining sharply.
• OPEC is likely to blink in any actual price war due to fiscal reality, but a glut is possible in the short run; post-2028, non-OPEC declines could change the picture.
• LNG is a tale of possible overbuild unless new demand materializes, especially from Asia or data centers.
• Copper is king for the energy transition, but both supply risks (underinvestment, smelter rationalization) and price-supportive trends (grid, EVs) are notable—demand remains a headwind short-term.
• Freight volatility is now a core concern for physical commodity players.

Closing Note

The episode delivers a panoramic view of 2025’s biggest commodity stories and the sometimes contradictory currents shaping 2026 prospects. Whether you’re concerned with macro-level risk (tariffs, AI, geopolitics) or focused on sector specifics (OPEC, LNG, copper), Fyfe’s and Chapman’s analysis contextualizes recent events and sets out the signposts to watch in the months ahead. The discussion’s tone is analytical but pragmatic, blending long-term structural views with trader’s attention to immediate risks and opportunities.

For more information about the HC Group and their work in energy and commodity search and advisory, visit www.hcgroup.global