...

Prices for energy transition metals to peak next decade

Oil&Gas Materials 5 October 2022 16:49 (UTC +04:00)
Prices for energy transition metals to peak next decade
Laman Zeynalova
Laman Zeynalova
Read more

BAKU, Azerbaijan, October 5. Long-term price dynamics of energy transition metals is highly uncertain and subject to different factors and shocks, Trend reports with reference to Fitch Ratings.

“We expect that prices for cobalt, lithium, copper and nickel will be growing, albeit to a varying degree, over the current decade to peak around 2030s driven by a steep rise in demand, as green energy infrastructure spending is front-loaded. Most of new energy infrastructure is expected to be constructed over 2030-2040, earlier in developed and later in emerging regions,” reads the report released by Fitch Ratings.

Fitch experts believe that the pipeline of new projects coming online post 2030, which will be stimulated by rising metal prices, will reduce expected supply gaps, balancing the market and normalizing prices.

The rise of carbon costs, which FPS expects to average USD60/t by 2030 globally supports an upward trend in metal prices. FPS forecasts that real prices for cobalt and lithium will rise by around 4x and 3x respectively by 2030, the highest rate due to strong demand growth, large market deficits and challenges in the project pipeline. Nickel real price is expected to grow by almost 2x by 2030 as the market will likely be more balanced than cobalt and lithium. Nickel’s incentive price for new capital investment decisions is estimated at USD18,000/t. Demand push for copper from decarbonisation technologies is smaller compared with other energy metals. CRU’s forecasts that copper price will reach USD10,000/t in 2030-2035 or around USD8,000/t in real terms. CRU calculated that 93 percent of potential new projects by 2032 will be cash positive (net of by-product credits) at the incentive price of USD7,775/t in real terms. This provides a fundamental level of support for copper prices in the long term. FPS anticipates a higher copper price by 2030 due to more ambitious decarbonization plans, although growth rates are lower than for lithium and cobalt with price rising by 50 percent in real terms by 2030. The price for aluminum, which is least exposed to energy transition demand, is expected to flatten around its long-run marginal costs.

---

Follow the author on Twitter: @Lyaman_Zeyn

Tags:
Latest

Latest