The Magazine for Asian Investors
Metals used for green technologies have been rising sharply again in recent years. Lithium, nickel, tin, silver, copper, cobalt, or manganese are facing an ever-increasing demand. Political decision-makers see the focus for the future all together on the development of green technologies, be it electric vehicles, energy production up to energy-saving housing. Especially in the promotion of electric vehicles, great hopes had been placed on the cost reduction of batteries as soon as they are mass-produced or through technological advances. On the other hand, there is a great demand as seen recently in China, after Tesla raised the prices of its two models Model 3 by 6% and Model Y by 9%.
Rising prices in the materials used for “green technologies” are rising costs for producers. Therefore, these rising prices will have to end up with the consumer at some point.
Nickel is a key metal in EV batteries. Nickel prices have increased by over 130% in the last five years and have reached their highest level since 2011.
Copper increased by almost 70% in the same period.
Tin, which is essential for electronics, is neglected by many, but here too prices have risen enormously. In the last 5 years, prices have increased by 130%.
Then there is lithium whose price rose by 511% within one year. Lithium, a key component of battery technology, will see a further surge in demand over the next few years, but experts in the field warn that supply may not be sufficient. If this is true, the price will experience further upward momentum.
Cobalt prices have also risen again this year, seeing a 56% price increase.
Even though many silver fans don’t see it, the price of silver has also increased in recent years. In the last 3 years, the price of an ounce of silver increased by 60%. Silver is becoming more expensive, but absolutely essential for green technologies. Especially since there is no real replacement for silver.
Why prices are unlikely to fall to the level they were 3 years ago must be sought on the supply side. Mining companies see a deficit of many metals in the next few years, including those mentioned above. In addition, from a political point of view, it is becoming more and more difficult to get new mining projects into production. Evil tongues would therefore say that with the increasing greed of the decision-makers less output is available in the end. Thus, it remains to be seen how far the prices are able to recover. But the demand due to the pressure for cleaner technologies will continue to rise in the coming years, that much is certain.