Commodity Watch: Small Markets, Big Consequences

22 July 2026

Ahmad Al-Sati

<div class="grid grid--33-66-col"><div class="col"><img loading="lazy" src="/getContentAsset/061c994a-a452-418f-bfa0-f2cf3cf5c577/cb87803a-320c-480f-ab75-7b9029eaaf79/Ahmad-Al-Sati-new.png?language=en" alt="Ahmad Al Sati - insights" title="Ahmad Al Sati - insights" style="width: 180px" class="fr-fic fr-dii"></div><div class="col">AHMAD AL-SATI PRESIDENT OF GEMCORP CAPITAL ADVISORS LLC, PORTFOLIO MANAGER Ahmad Al-Sati is Portfolio Manager of the Gemcorp Commodities Alternative Products strategy (GCAP) and President of Gemcorp Capital Advisors LLC, based in New York. He is responsible for leading Gemcorp’s commodities-focused investment strategy and overseeing the firm’s US advisory platform.</div></div><hr>In Poor Richard’s Almanack, Ben Franklin touched on the “horseshoe parable” where a kingdom is lost for want of a horseshoe nail. The parable is at times cited as an example of butterfly effects, but it also highlights how small fracture points can lead to dire results.   The knock on rare earths and critical minerals is that their total annual markets are too small to matter. For example, copper’s (a critical metal in its own right) annual market size is ~US$280 billion.1 The total annual market for rare earths is less than US$5 billion.2 Antimony (which I wrote about last year) has a market size of ~US$1.2 billion (about the same size as the market for chia seeds) – rising to ~US$5 billion including derivative products. More importantly, because these elements represent a small percentage of the total cost for most products, an increase in their price does not seem to matter for finished goods. Thus, despite critical minerals and rare earths representing 20% of battery costs and 40% of magnet costs, they represent only 3% and 1% of an EV’s total cost, respectively.3    Two points to consider.     Price is not the issue. Availability is. If you can’t produce a product because an essential component is scarce, does price really matter? If supply chains for these small but essential elements break, rationing or other restrictions may halt important portions of the global economy. With increasing trade disruptions, intentional or not, this risk is real. Think of the nail in the horseshoe.    Production is not only a function of geology and capital. The small size of these markets tends to favour large, vertically integrated (yes subsidized) operators- a winner-take-all dynamic. Without offtake assurances or other financial encouragement, will private investors pursue production and processing projects if the addressable market is small? Over the last two decades, some governments understood the benefits of securing these elements. Others did not. And the latter are now paying the price. Thus, strategic long-term partnerships and financing may ultimately be required to secure a steady, reliable supply of these materials.    As I’ve written before, we have seen increased supply chain disruptions over the last six years. These interruptions have been short and long, driven by pandemics, trade wars, real wars, as well as geopolitical and trade reconfigurations. They have introduced the names of new elements into the lexicon. And they have been expensive. Per the IEA, Chinese export controls on battery metals could jeopardise US$6.5 trillion of production chain across multiple industries. The Strait of Hormuz closures drove the point home across several other commodities. To paraphrase Mr. Buffett’s quote on oxygen and market confidence, we have gone decades without thinking about the importance of commodities in our lives. As their supply chains become more fragile and their availability scarcer, we may not think of anything else. Sources: 1 Fortune Business Insights (2026). Copper Market Size, Share & Industry Analysis.2 U.S. Geological Survey (2025). Mineral Commodity Summaries.3 International Energy Agency (2026). Global Critical Minerals Outlook 2026. Important InformationThis content has been prepared solely for informational purposes by Gemcorp (as defined below), is confidential and may not be reproduced.This content does not constitute an offer or solicitation of an offer with respect to the purchase or sale of any security and should not be relied upon when evaluating the merits of investing in any securities or form the basis of an investment decision. 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