Overall the market capitalisation has increased by 26%. While some have expressed concern that the market capitalisation of the industry has increased too fast and too much; the jump is attributable largely to balance sheet growth following 2010's stellar results.

The outlook expressed by industry leaders is increasingly positive, with companies taking definitive action on capital projects, as well as mergers and acquisitions. In a view from the top, the CEOs note their continuing belief in emerging markets, particularly the ongoing growth in China and the nation's ability to achieve or exceed the 7% growth target outlined in the 12th Five Year Plan. Resource nationalism and stakeholder management occupy a higher degree of attention from the CEOs, as does the ever increasing complexity and sophistication in the industry.

With mining continuing to climb up the political priority list at a time of budget deficits and changing economic and social priorities, many governments are looking at reforms to their mining codes, grappling with sustainability issues and revisiting their approach to taxation and royalties. In what's mine is mine we are joined by Eurasia Group, which has provided an overview of a number of the key drivers for these trends in light of a growing focus on corporate transparency and the interplay between corporates and society.

Eoin Treacy's view Fullermoney has long characterized the secular bull market in commodities as Supply Inelasticity Meets Rising Demand. The demand side of the equation is based on the rising per capita consumption of commodities. Hundreds of millions of people, mainly in Asia, have emerged from a subsistence lifestyle into the middle classes. This is helping to fuel the secular demand cycle.

Supply was initially constrained by a long bear market for related companies which robbed them of capital, talent and opportunity. This meant that when demand for commodities began to increase, miners, energy and food companies did not have the wherewithal to increase supply and prices advanced. Iron-ore in particular has been dominated by an oligopoly of three major producers which have resisted calls to increase supply in order to support annual price increases. Major producers of potash and copper as well as other essential metals have attempted to follow a similar path.

However, following more than 8-years to the upside for many industrial resources, new entrants are beginning to bring additional supply to market. Well capitalised major miners have also announced ambitious plans to increase supply. Concurrently commodity consumers have announced plans to develop their own mining activities to ensure security of supply and in an attempt to decouple from the dominance of major miners.

The result is that while the demand side of the equation remains on a secular uptrend albeit punctuated by recessions. The supply side response, which had previously been rather tentative about investment, has experienced a change of emphasis.

Major bull markets do not generally end because demand suddenly disappears, although tighter monetary conditions can certainly play a role in that regard. On the other hand an explosion of supply is often an equally important if not more relevant factor to the end of all secular bull markets regardless of asset class. For example, the peak of the Nasdaq bubble saw a huge number of IPOs which increased supply. The US housing bubble resulted in massive overbuilding. Arguably, the 30+ year bull market for US Treasuries peaked two years ago as governments and corporates raised to increase supply. The last secular bull market in commodities peaked in the early 1980s at a time when interest rates were rising sharply and a slew of new mines were opened.

It is for this reason that those with investment positions in commodities need to take note of plans to increase supply. It takes years to open new mines and the current investment optimism is still in the planning stage which means that supply inelasticity is likely to remain a bullish case over the short to medium term. Whether it remains a significant aspect over the next decade will depend very much on the potential for a race to bring new supply to market developing among the majors.

In the meantime, the FTSE-350 Mining Index crashed lower in 2008, completed a Type-2 bottom, as taught at The Chart Seminar, in the first quarter of 2009 and has since rallied back to retest the high. It has been ranging since January and completed a reversion towards the 200-day MA, which it is currently testing. It will need to continue to find support in this region if the medium-term uptrend is to remain consistent. The S&P500 Materials Index has a relatively similar pattern.

The Australian S&P/ASX 300 Resources Index and the S&P/ASX Small Cap Resources Index have similar patterns but have posted somewhat deeper reactions of late.

The Canadian S&P/TSX Materials Index outperformed until late year, surmounting its pre-crisis peak. It has pulled back rather sharply since mid May and is currently ranging mostly below 3900. It will need to hold above that level to confirm a return to medium-term demand dominance.

The FTSE/JSE Africa Mining Index has fallen to test the 35,000 area which had offered resistance in 2010. The medium-term uptrend can continue to be given the benefit of the doubt provided the Index continues to find support in this area.