TMN - Metal

How could green energy transition push metal prices?

The World Bank forecasted that metal prices would notably increase in the coming years due to the expected surge of the energy transition on economies.

The growth of countries recently took a toll on the persisting headwinds in the market. For instance, the COVID-19 pandemic, the Russia-Ukraine war, and the effects of climate change triggered mounting oil prices.

In line with this, states gradually turn to the energy transition that could ripple higher demand for metals and minerals. The shift would yield the development of green resources like electric vehicles, renewable energy, and other low-carbon technologies.

At the same time, the changeover would specifically bolster copper and aluminum prices.

Specifically, manufacturers use the red metal in wind turbines, solar panels, grid connections, EVs, and battery charging infrastructure.

On the other hand, aluminum is for battery packaging, hydrogen fuel cells, and solar photovoltaics.

However, the bank mentioned that one of the critical risks for metal prices is the geographical concentration of minerals. Some key regions within the world often centralize the resources.

For example, China is the single largest consumer and producer of refined base metals. The country accounts for about 50.00% of the global consumption of the cited commodities.

Then, the Democratic Republic of the Congo brings out 70.00% of cobalt output, which is significant for electric-vehicle batteries.

This issue could result in supply risks and price volatility in the market. Nevertheless, it would bring windfall profit for countries that host the minerals and their processing.

Metal prices mixed on Friday

Meanwhile, on Friday, metal prices grappled for direction as some investors feared that a global economic slowdown could shadow demand.

Aluminum futures rose 0.69% or 19.00 points to $2,761.00 per tonne after inventories touched a record low.

Conversely, contracts tied to copper slipped 0.25% or 22.50 points to $9,071.50 per tonne. This downturn kept the metal on track for its sixth consecutive weekly decline.

Likewise, nickel prices plummeted 1.13% or 325.50 points to $27,484.50 per tonne. Experts noted that the tight supply remained unchanged despite the decreasing demand.

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