Before this decade is out, more than half of new vehicle sales will either be hybrid or fully electric vehicles (EVs). By 2035, more than half will be entirely electric.
If you’ve seen what the oil market has done across the past 100 years, you are likely aware that this shift it going to be monumental for financial markets. This shift is perhaps one of the most important shifts in the way society operates that we will see in the coming decades.
Already this has caused by increase in prices for lithium. Lithium miners have started skyrocketing in price as a result.
However, even though the demand growth for lithium coming from the EV industry is expected to grow 900 percent across the next 10 years, there are metals that are expected to see even stronger growth.
For example, the growth in demand for copper coming from the EV industry is expected to grow 1000 percent across the next decade, while for nickel, this number is 1300 percent.
Already the prices for copper and nickel have reach all-time highs this year and these highs could easily be broken in period ahead.
Indeed, Kostas Bintas, head of copper trading at Trafigura, the world’s largest copper trader, has predicted that copper could hit all-time highs of $15,000 a ton. Currently copper sits around $9,600 USD/tonne.
First copper will have to weather a difficult period, with somewhat subdued activity in the Chinese economy expected across the next quarter as they recover from issues in their construction sector.
Nickel also has a rosy outlook heading into the next decade. The US government recently added nickel to its critical minerals list due to its use in a range of high-tech products.
At present, the majority of nickel demand is for the stainless-steel market and prices for nickel are somewhat subdued at the moment due to restrictions on steel production in parts of China.
These restrictions are expected to start easing in the first quarter of 2022, which should help nickel prices in the short-term. However, it is the requirement of high-grade nickel in batteries that should cause a strong increase in nickel demand thereafter.
Rystad Energy, an independent energy research company, estimates that demand for nickel will grow by around 36 percent over the next three years. The share of nickel being used in batteries is also expected to rise from 9 percent at present, to over 20 percent of nickel demand over this time; by 2026, batteries are expected to account for more than 30 percent of nickel demand.
Australia has a host of attractive copper and nickel miners and many of them are listed on our market. If you are interested in receiving our recommendations on copper and nickel miners heading into 2022, check out EmeraldEquities.com.au. Our last recommended stock in the space made a 94 percent profit for our investors.
Sam Green is the Portfolio Manager at Emerald Financial, whilst also being an Equities and Derivatives expert for his clients at TradersCircle.
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