Andy Home of Reuters reports that the research house predicts the world will need three billion metric tons of metals between 2024 and 2050 to meet global emissions targets. The figure doubles to six billion in a net zero scenario. Home writes:
The global energy transition was the dominant theme at this year’s London Metal Exchange (LME) Week, the annual gathering of the world’s metals producers, users and traders.
True, the metallic path to net zero is proving much bumpier than expected. Prices of battery metals such as lithium, cobalt and nickel have bombed over the last year. Too much supply has been brought on too quickly just as electric vehicle sales have hit a slow patch.
But the promise of a future boom is undiminished.
Many key energy transition metals are expected to face supply shortfalls this decade, some as soon as this year, according to BloombergNEF. […]
Inflation expectations have changed significantly in recent years and fund managers are once again looking at commodities as a way of generating an inflation-adjusted return.
The ideal ratio of hard assets in an investment portfolio should be between 4% and 9%, according to Jigna Gibb, head of commodity index products at Bloomberg, who also spoke on the LME Monday seminar panel.
That’s at least double current allocations in a sector that is valued in the trillions of dollars.
Metals are the clear stand-out in the commodities sector thanks to their pivotal role in decarbonisation. […]
The bull narrative, however, hasn’t lost any of its resonance. Copper was the top pick for attendees at last week’s LME seminar for the third year running.
If enough investors agree, copper’s potential for further price gains will become a self-fulfilling prophesy.
But that was how things looked in the 2000s as well. The reality proved very different.
Read more here.
