Here at the Financial Star, we talk about the trends that will reshape the world in the decades to come… From plant-based food… to clean energy… to cutting-edge technology. We cover all you need to know to profit from tomorrow’s biggest trends.
But you should also know this. You can’t start a “green revolution” without commodities. You can’t build the world of tomorrow without access to materials… like base metals. And precious metals, but we’ll cover them in a future article.
Today we’ll talk about the four metals that will see their demand soar as the world becomes cleaner and greener.
How much will it soar in the long term? Let’s see…
Copper: Demand to Soar 3x
The world is hungry for copper. We need this metal to manufacture wires and transmit electricity. You may have heard that there’s an electric vehicle revolution happening. And these cars use four times more copper than gas-powered ones.
An average car has about 20 kilograms of copper. Electric vehicles use about 80 kg.
Solar and wind power generators… energy storage systems… EV charging stations… they all need massive amounts of copper.
So the copper market will be in a state of deficit. It means that mine supply won’t catch up with the copper-hungry clean energy revolution.
Fitch Solutions says that the deficit will widen from 299,000 tonnes in 2020 to 510,000 tonnes in 2027.
In the long-term, Glencore, a commodity trader, says that the world will need three times more copper than it does now.
Imagine what that could do to its price… which has already been rising in a straight line for a year. Over the past year, copper has been up 67%.
There’s no reason it won’t keep doing that.
But there’s more…
Zinc: Demand to Soar 3x
Zinc, like copper, has been on fire over the past 12 months. Its price soared by almost 42%.
Zinc is the future of energy storage. Metals like vanadium and rare-earth elements are used for that purpose now, but they often come from unstable countries. Zinc, on the other hand, is easier to procure in the United States.
Another major benefit of zinc for energy storage is its low price. As the grid needs more metals for storage, the cheap ones will win over the more expensive ones. Otherwise, a clean energy transformation will not be feasible.
Energy storage is a trillion-dollar market, and zinc has an excellent chance to be the foundation of this big business.
No wonder that its price has been going up so much.
But it’s still early days for this megatrend. It will continue unfolding over the coming decades. Positioning yourself now is a great idea.
Nickel: Demand to Soar 4.5x
Nickel has been on a tear over the past year… and it’s just the beginning. Its price is up 34%. It’s dipped over the past couple of weeks, which we see as an opportunity.
Nickel is a “battery metal.” This means that as EVs take over the world, their manufacturers will consume larger and larger amounts of nickel.
This is why Glencore predicts that nickel demand will soar by 4.5 times in the long-term.
And there’s not enough high-quality nickel material, called “nickel sulfate,” to support this growth.
In other words, this is another market that will become even hungrier for the highest-purity nickel available. And how nickel suppliers will match that demand is an open question.
There is no question, however, that EVs will take market share from gas-powered vehicles. Deloitte, a consultancy, says that EVs will take over 20% market share in the US in 2030. And in China, whose car market is already higher than that of the US, EVs will account for about 50% of all cars sold in 2030.
In other words, one-half of the largest car market in the world will be electric soon. This will support 4.5x demand growth for this “battery metal.”
Cobalt: Demand to Soar 5x
Finally, let’s talk about cobalt. Its market will grow the fastest in the coming years.
And its price, even though it has already increased by 67% over the past 12 months, has most likely the biggest upside.
Cobalt is critical in both solar and wind power systems. Cobalt is used for storing energy that the wind turbines and solar panels produce.
Cobalt is also used in wind systems as one of the most powerful magnets. These systems need magnets to keep producing electricity even at low wind speeds.
In other words, cobalt will make it possible for the wind energy to spread even in the areas that don’t have a strong wind.
This is one of the drivers that will increase the demand for cobalt by 5x.
And most of the Cobalt comes from the risky jurisdiction of the Democratic Republic of Congo. This is an unstable situation. Any disruption in the production from the world’s number one supplier will send shockwaves through the global clean energy supply chains.
But this is a fantastic setup for investors. In our opinion, as the global demand for cobalt soars, its price will reflect it.
These are the four metals that you need to have on your radar: copper, zinc, nickel, and cobalt. We will keep you up-to-date on the biggest trends moving these commodities…
What about precious metals, though? Be certain that they have a place in the cleaner, higher-tech economy of the future.
We’ll cover them for you soon. Stay tuned…
Thank you for your loyal readership,
The Financial Star Team