A surge in commodity prices has the local materials sector on track for its best December on record as investors contemplate the beginning of a potential commodities super-cycle, and the broader market rules off its longest winning streak in four years.

The Australian sharemarket is heading into Christmas trading near a 10-month high, led by the major iron ore miners, as investors tip the global economic recovery will mean commodities will be in high demand.

The S&P/ASX 200 Index fell 81.2 points, or 1.2 per cent, to 6675.5 on Friday, but still capped off a seven-week winning streak for the first time since May 2016.

While the market strength in December has been broad, BHP Group, Rio Tinto and Fortescue Metals Group have been responsible for half the gains alone, driven by surging iron ore prices.

“These guys are making better margins than Louis Vuitton does on his handbags at the moment,” said AMP Capital portfolio manager Dermot Ryan.

“The stimulus that’s coming in and the global synchronised recovery means we’re seeing higher commodity prices right across the board.”

Read more about the rally in resources stocks here.