I last wrote about the increase in commodity prices nearly nine months ago. That related to China's massive appetite for base metals and raw materials, which showed no signs of letting up.
Since then, the four main UK-listed mining companies have continued to rise, with profits reaching record levels.
In fact, many investors could have been forgiven for thinking that after most mining stocks had already risen about 50 per cent, it was too late to jump on the commodities bandwagon.
Unfortunately for them, the mining sector has continued to rise, with most of the main mining shares soaring nearly 70 per cent in the past nine months.
That was helped by record results announced in February, with companies reporting no signs of a slowdown in demand.
However, as well as the large rise in production and profits, companies have also seen costs increase, due to high energy prices.
This has not prevented most of the listed companies from declaring they intend to return large amounts of excess cash to shareholders, through increased dividends, special dividends and share buy-backs.
This always goes down particularly well with shareholders, helping the shares to outperform even more.
The only problem facing mining companies is the difficulty in purchasing new mining equipment, which has seen demand grow in line with commodities.
Although most companies are investing record amounts in increasing production levels, it is likely that this will take at least another two years before supply finally begins to catch up with demand.
Rio Tinto's latest results last week showed that production levels had continued to rise across the majority of its commodities over the past quarter.
Rio Tinto, as with the majority of mining companies, is running at nearly 100 per cent productivity.
This is in order to take advantage of the extremely high prices being paid for raw materials as demand continues to outstrip supply.
As had been mentioned in the past, this demand is primarily emanating from China, which continues to invest heavily in new housing and road networks.
The details of how much copper will be required to complete the pipework within the new houses, and how many miles of motorway the Chinese expect to build over the next five years, are mindblowing.
Unless the Chinese economy implodes, it looks very much as if the demand for commodities will continue to increase.
While there will no doubt be a point where the market will become saturated and prices will begin to fall, at least for the time being, this seems some way off.
Fortunately this strong demand for raw materials does not affect the day-to-day lives of most people.
But this is not true for the equally strong demand for oil, which, like other commodities, is going through a period of under supply and over demand.
Despite these high prices, it still seems unlikely that emerging economic superpowers will alter their strategies or their demands.
I believe it takes a brave man to decide against investing in the oil and gas and mining sectors, although sometimes it seems as if it would take an equally brave man to invest new money at current levels.
What is certain is that, as these sectors make up about 25 per cent of the UK market, their influence, positive or negative, will be felt by the wider market.
* Michael Rankin is an investment manager in the Teesside office of Wise Speke and can be contacted on 01642 608855. Views expressed are the author's own and are not necessarily held throughout the Brewin Dolphin Group. Wise Speke is a division of Brewin Dolphin Securities Ltd, a member of the London Stock Exhange, authorised and regulated by the Financial Services Authority. Prices, values or income may fall against investor's interests. You should therefore be aware that you may get less back than you invested. Investments may not always be suitable for all individuals. If you have any doubts, you should consut a professional advisor.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article