LONDON A clear consensus about which commodity will top the performance charts this year is proving hard to call because of doubts about global economic prospects.
But fund managers have a list of commodities, such as platinum, they favor if demand accelerates as many expect.
Those tipped for outperformance are most strategically placed to benefit from an upturn in the industrial cycle, as manufacturing and construction resume some semblance of normality after crisis and stagnation.
Copper for instance, used in power and construction, is a popular play on infrastructure.
But the outlook is cloudy because of doubts about the strength and durability of recovery in the world outside China, which powered ahead last year, growing by 10.7 percent year-on-year in the last quarter of 2009.
"A major determinant for future commodity market strength is the shape of growth in developed markets," said Saleem Siddiqi, a partner at Tapestry Asset Management. "That is the big question ... the picture is cloudy."
China is one of the world's largest consumers of natural resources such as copper, oil, coal and grains.
Its demand has ballooned in league with long-term industrialization, while a fast growing middle class is also starting to demand a protein-rich diet -- more meat.
Attempts to price in robust demand growth in China and other emerging markets last year was a major factor behind the rally, which was also predicated on relief that the world, albeit for now, had avoided a depression to match that seen in the 1930s.
China accounts for a significant proportion of global commodity consumption -- more than 30 percent of copper and about 10 percent of crude oil. But top economies like the United States, Japan and Germany are also crucial in the equation.
For graphic of Chinese, U.S., German and Japanese growth click here
"(It's) dependent on what your macro view is, whether you believe the U.S. and other OECD countries are recovering," said John Wong, a portfolio manager at New City Investment Managers.
"I favor a double dip but ... I need more data points. In a bullish scenario, you would pick something like copper, platinum, oil because of tight demand/supply dynamics."
PLATINUM - A BEACON?
Platinum, used to make autocatalysts to clean emissions primarily for diesel engines, is a commodity in the spotlight because of strong industrial and investment demand.
"With 70 percent of output coming from South Africa and problems with power -- if there's any disruption then you will see a price hike," said Patrick Armstrong, managing partner of London-based Armstrong Investment Managers.
Adding to the metal's industrial fundamentals, the appetite for investment has been demonstrated clearly via the recent launch of the first U.S. platinum and palladium exchange-traded funds earlier this year, owned by London-based ETF Securities.
Holdings in the platinum fund surged more than 30,000 ounces on Friday to about 244,940 ounces.
Platinum prices are at around $1,545 an ounce, a gain of about 60 percent since the start of 2009.
For graphic of platinum price and U.S. growth click on
Oil at around $75 a barrel, up more than 60 percent since January 2009, is potentially lucrative. But at the moment it is unlikely to make much money for investors because of high inventories and the negative roll yield.
The roll yield is the difference between the money received for selling a maturing oil futures contract and the money paid for another contract with a longer maturity.
Copper comes into play as governments around the world ramp up spending to bring transport, health, education and water systems into the 21st century.
But other base metals such as stainless steel ingredient nickel, battery material lead and tin could yield more.
"They have the least expansion in terms of supply and ... I think that's where people have destocked the most," said Lars Steffensen, a fund manager at Ebullio Capital Management.
Some expect agriculture to be an important source of return overall. However, relative value plays in grains could be better bets for investors looking for returns at a deeper level.
"Examples would be acreage shifts between corn versus soybeans or wheat versus cotton," said Omar Kodmani, senior executive officer at Permal Investment Management Services.
Grains also feed into livestock and higher meat consumption because of growing affluence, even if growth is fragile.
"Even if we only get a mild recovery that would lead to higher meat consumption," said Alex Allen, CIO at Eddington Asset Management. "Cotton ... just some growth should lead to higher cotton prices."
(Graphics by Scott Barber; Editing by Sue Thomas)