See what's driving the recent Singapore commodities rally

Performance recovery seen in late 2H13.

OCBC suggests that part of the recovery of Singapore commodities recently has been because of news that economies are slowly recovering, led by the US.

Positive reports have been coming out pointing to a nascent global recovery, International Monetary Fund's latest World Economic Outlook (WEO) report released in October that now expects World Output to grow 3.6% in 2014, up slightly from the likely 2.9% growth in 2013. It should be noted though that the outlook came with warnings of prevailing downside risks.

The commodities sector has performed relatively poorly against the broader market for most part of 2013, said OCBC.

"Against the STI’s 0.4% showing until 6 Dec 2013, the commodities stocks under coverage fell by an average of 6%. They had also fallen by as much as 19% at their lowest versus the STI’s 6% slide before staging a recovery in late 2H13," the research firm said.

Looking forward, OCBC said the slower Chinese economy is one of these downside risks that could could hurt the global recovery, and in turn, stunt the rebound of Singapore commodities.

OCBC explained that the slowing growth in China may affect many other economies, notably the commodity exporters among the emerging and developing economies.

"However, IMF believes slower near-term growth is a worth-while trade-off as there will be positive net effects in the longer term, which should lead to more stable demand for commodities," said OCBC.

Singapore commodoties stocks could also benefit from a changing attitude among investors as the US economy shows signs of a stronger recovery.

"While market sentiment may remain somewhat cautious until investors get a better handle on the magnitude and extent of the Fed tapering (widely expected to take place sooner rather than later), we believe that further signs of a firmer recovery in the US economy could lead investors to adopt a more 'risk on' approach," said OCBC.

"And with the valuations of some of the commodity plays still looking relatively inexpensive, we could see potential upgrades for some of them if there is an over-correction in the market," it added.