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This infographic from Visual Capitalist, sponsored by Tartisan Nickel, explains how electric vehicles, the renewable energy sector and the electrification of everything are impacting the base metal market.
The base metal market is a cyclical one. Within the past three years, prices for base metals have been bouncing back from a post-commodity supercycle low, developing into what looks like a bull market.
Growing prices for elements like nickel, cobalt and copper are tied in part to rising demand for electric vehicles (EV) and global calls for renewable energy.
China has been driving the recent recovery of the base metal market with their efforts to improve environmental standards and to eliminate low-quality and environmentally toxic metal production. As of July 2018, China alone will account for 39 percent of the global EV market in 2030 which is set to grow by 2.27 percent, according to BloombergNEF.
The base metal market has also grabbed the attention of the renewable energy sector. Solar and wind technology is expected to see substantial growth by 2040 and, according to the International Energy Agency, both segments of the clean energy industry require vast amounts of base metals.
Approximately 85 percent of solar panels currently on the market are comprised of crystalline silicon cells, which are made up of aluminium, iron, lead, nickel and silver. These cells offer a variety of benefits including long-term reliability and high performance rates. New technological advances for the film can reduce manufacturing costs and create a more flexible cell.
Renewable energy technology and EVs have also led to the development of the lithium-ion battery, which is a cheaper, smaller and lighter alternative that contains a larger energy capacity than traditional lead-acid batteries. Tesla’s (NASDAQ:TSLA) Model 3 EV is reliant on nickel, a component used in lithium-ion batteries, but only 10 percent of the nickel produced contains battery grade nickel sulfate.
In order to meet this demand, efforts to find more base metal deposits will be needed as current supply levels are depleting. London Metal Exchange (LME) warehouse supplies, for instance, are reaching five year lows.
The following Visual Capitalist infographic, sponsored by Tartisan Nickel (CSE:TN), will help investors learn more about clean energy and the electrification of everything and how this affects the base metal market:
