Copper, cobalt, lithium, nickel & tin, among the materials that will dominate the green and digital transition
A new report from Fitch Solutions predicts that certain “conventional” raw materials will receive an additional boost over the next 20 years, as they take center stage in green and digital transitions.
These products include copper, nickel, tin, aluminum and rare earths which, along with lithium and cobalt, are expected to experience a boom in demand over decades in the midst of the battery revolution. .
“While the ‘traditional’ base metal mining and refining sectors such as copper, nickel, tin and aluminum are well established, we note that the lithium and cobalt will develop rapidly in the years to come and that these markets will mature ”. document states.
However, some materials are more exposed than others to a drop in demand, says Fitch.
In the opinion of the market analyst, extensive research and development to improve the efficiency, cost and durability of batteries will lead to rapid developments in the types of battery chemistries with cobalt hanging from a wire , as targeted by many players in the battery supply chain. reduce or completely eliminate cobalt from batteries given the high durability / ESG risk associated with the commodity.
In addition to ESG issues related to cobalt production, Fitch said, the metal – as well as rare earth elements – may also experience supply vulnerabilities due to a concentration of production in geopolitical hotspots or sustainability issues.
The review also predicts good demand prospects for scrap metal, as the recycling and use of steel electric arc furnaces (FEA), which require scrap metal, increases dramatically over the 10-year horizon.
Steel and iron ore
Fitch’s report says demand for steel and iron ore – and therefore demand for zinc – is expected to slow over the years and register the most moderate growth among metals. Lower consumption would be caused by duller growth in China and increased efficiency in the steel sector.
The demand for high-quality and green steel, on the other hand, is expected to be much stronger in the context of a probable multiplication of decarbonization policies over a 10 to 20 year horizon.
Digitization and modernization initiatives in the infrastructure sector such as China’s “ new infrastructure ” plan, as well as the decarbonization of the manufacturing sector, are likely to require high quality, lighter weight and low carbon steel. carbon. This means that the demand for scrap steel will also be strong by 2030, as the less polluting capacity of the AEP will increase dramatically.
