Why Natural Resources Are Back in Focus
Investors are rediscovering commodities. Once viewed as cyclical and peripheral, resources like copper and timber are now at the heart of conversations about portfolio resilience, inflation protection, and long-term growth. The U.S. energy transition, rising infrastructure needs, and sustainability mandates are converging to make natural resources not just relevant, but essential.
Demand Drivers: Energy Transition and Domestic Growth
The energy transition is reshaping demand across the commodity spectrum. Copper is indispensable for renewable energy infrastructure, electric vehicles, and power transmission. Without significant new domestic investment, supply is unlikely to meet demand. In 2024, U.S. mine production totaled about 1.1 million metric tons of recoverable copper, valued at roughly $10 billion, according to the U.S. Geological Survey (USGS, 2025).
Timber is also gaining recognition beyond its traditional role in the construction industry. U.S. forests play a dual role in meeting material needs and serving as carbon sinks. For investors, this combination of utility and environmental benefit positions timber as both a cyclical commodity and a long-term ESG-aligned asset.
The U.S. Forest Service averaged 5.59 million hundred cubic feet (CCF) of timber sold annually from National Forest System lands between 2014 and 2023, compared with a target of 6.28 million CCF (GAO, 2025).
Supply Constraints and Structural Risks
Resource supply is not easily scaled in the United States. A study prepared by S&P Global Market Intelligence for the Copper Development Association found that new copper mining projects typically take an average of 29 years to reach production. Without accelerated permitting and investment, the U.S. is projected to rely on imports for 60% of its refined copper needs by 2035 (Recycling Today, 2023).
Recycling does contribute meaningfully, but is insufficient on its own. In 2024, secondary recovery from copper scrap accounted for about 35 percent of the total U.S. supply (USGS, 2025).
The timber sector faces its own structural risks. Wildfires, pests, and shifting land-use policies all weigh on future supply. U.S. softwood lumber production reached 66 million cubic meters in 2023, down slightly from 2022. Hardwood lumber output peaked at 17.6 million cubic meters in 2022 but declined the following year (UNECE, 2024). Exports remain a significant component, with U.S. forest products trade valued at approximately $9.6 billion, according to recent USDA data (USDA FAS, 2025).
Commodities as Inflation Hedges and Diversifiers
Commodities have historically served as a hedge against inflation. With inflation expectations elevated and interest rates still above historical norms, this characteristic is drawing renewed interest.
Beyond inflation protection, commodities also diversify portfolio risk. Traditional equity and fixed-income allocations often struggle in inflationary or rate-tightening cycles. Copper, timber, and other resource exposures introduce a distinct return profile that can enhance portfolio resilience.
The ESG Imperative
Sustainability is increasingly central to U.S. resource investing. Copper mining is concentrated in states such as Arizona, New Mexico, Utah, and Nevada, where water availability, land rights, and community impacts are critical considerations (USGS, 2025).
In forestry, ESG scrutiny is equally significant. Timber operations must strike a balance between harvest levels and biodiversity, wildfire management, and carbon sequestration goals. Institutional capital is already favouring operators with strong certification, transparent reporting, and long-term environmental stewardship.
Considerations for Investors
- Targeted Domestic Exposure
Copper and timber fundamentals differ. Metals critical to electrification carry strong growth drivers, while timber may provide more defensive and ESG-aligned exposure. Allocations should be intentional and subsector-specific.
- Operator Quality and ESG Standards
Company selection matters. Prioritize operators with disciplined cost structures, diversified supply chains, and verifiable ESG practices.
- Supply Chain Awareness
Resource investing goes beyond the asset. Transport costs, energy prices, labour dynamics, and policy bottlenecks all influence returns.
- Managing Volatility
Commodities are cyclical. Incorporating hedging strategies and sizing allocations conservatively can mitigate downside while preserving upside potential.
Outlook: From Peripheral to Core
Looking ahead, U.S. commodities are positioned to play a central role in both energy transition and sustainable construction. Copper will remain crucial to electrification, grid modernization, and the deployment of renewable energy. Timber will serve dual markets, meeting housing demand while supporting carbon and ESG objectives.
The path will not be smooth. Policy, permitting, and environmental pressures will shape both industries. Yet the structural drivers of demand remain durable, positioning commodities to shift from peripheral to core portfolio holdings.
Conclusion
The momentum in commodity investing reflects fundamental shifts in U.S. economic priorities. Copper and timber illustrate how natural resources intersect with electrification, inflation protection, sustainability, and national security. For investors, these trends underscore the importance of selectivity, discipline, and a long-term perspective.
At BTR Group, integrating U.S. commodity exposure into portfolios offers both opportunity and responsibility: the potential for growth and diversification, coupled with a mandate to support sustainable practices in resource development.
References
- U.S. Geological Survey. Mineral Commodity Summaries: Copper 2025. (USGS)
- Recycling Today. “Study assesses how the US can meet projected copper demand.” July 2023. (Recycling Today)
- Government Accountability Office (GAO). Forest Service Timber Sales: Better Data Could Improve Oversight. February 2025. (GAO)
- UNECE/FAO. United States Forest Products Annual Market Review 2023–2024. (UNECE)
- USDA Foreign Agricultural Service. Forest Products Data – Horticulture and Forestry. 2025. (USDA FAS)
Disclaimer: The views and information in this post are for general information only. They do not constitute investment, legal, accounting, or tax advice, and are not an offer or solicitation for any security or service. Some data may come from third-party sources believed to be reliable, but BTR Group does not guarantee accuracy or completeness. Past performance is not indicative of future results. Please consult your professional advisers before acting on any information here.