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7 Commodity Winners In Electrified Car Revolution

7 Commodity Winners In Electrified Car Revolution

As Tesla (TSLA) ramps up U.S, production of lithium batteries for electrified cars and expands into emerging markets, the ridership revolution will have a profound influence on commodities.

An AB team of market experts headed by metals Analyst Paul Gait ranks the commodities that ought to benefit the most: 1. Copper, Two. Nickel, Three. Cobalt, Four. Graphite, and then behind: Five. Lithium, 6. Manganese, 7. Aluminium. But they add that current commodity prices don’t support the required request for copper. They write:

” . innovation in batteries is enabling an electrical revolution that has massive ramifications. . It took one hundred twenty years to build the modern copper industry. The electrical vehicles revolution could require the supply base of copper to dual again, but this time in only twenty years. This will be a prodigious feat and is simply unachievable at today’s commodity prices. . the total requirement is 35.8 million tonnes of copper equivalent production within the next twenty years. the real issue is how the supply side moves to accommodate [request] and what the price elasticity of supply is. Where commodities are economically scarce, any increase in request growth beyond current levels will be very hard to meet. Assuming that the transition to EVs [electrical vehicles] does take place, the global mining industry will need a capital increase of inbetween US$350 to US$750 billion. But . the capital increase is very concentrated in . copper, nickel and cobalt. . Lithium is an abundant commodity where very little fresh capital is required to supply all the supply that we will need to enable the EV transition. Which equities could suggest the adequate exposure? Being long electrified vehicles further down the value chain comes down, for investors, to response the question as to which player will emerge as the winner in this revolution – the risk being to back the wrong pony. However, by gaining exposure through raw materials, one can eliminate that risk: all producers of the key commodities identified above should benefit through the appreciation of commodity prices.

Equities AB thinks will benefit include a mix of Canada, Australian and United Kingdom companies that trade over the counter in the United States: Ivanhoe Mines (IVPAF) (copper), which also trades in Canada and Germany; mining and commodity-trading play Glencore (GLNCY) (copper, cobalt & nickel); Very first Quantum Minerals (FQVLF) (copper, nickel); Clean TeQ Holdings (CTEQF) (non-covered, nickel & cobalt) and Syrah Resources (SYAAF) (non-covered, graphite).

7 Commodity Winners In Electrical Car Revolution

7 Commodity Winners In Electrified Car Revolution

As Tesla (TSLA) ramps up U.S, production of lithium batteries for electrical cars and expands into emerging markets, the ridership revolution will have a profound influence on commodities.

An AB team of market experts headed by metals Analyst Paul Gait ranks the commodities that ought to benefit the most: 1. Copper, Two. Nickel, Trio. Cobalt, Four. Graphite, and then behind: Five. Lithium, 6. Manganese, 7. Aluminium. But they add that current commodity prices don’t support the required request for copper. They write:

” . innovation in batteries is enabling an electrified revolution that has massive ramifications. . It took one hundred twenty years to build the modern copper industry. The electrical vehicles revolution could require the supply base of copper to dual again, but this time in only twenty years. This will be a prodigious feat and is simply unachievable at today’s commodity prices. . the total requirement is 35.8 million tonnes of copper equivalent production within the next twenty years. the real issue is how the supply side moves to accommodate [request] and what the price elasticity of supply is. Where commodities are economically scarce, any increase in request growth beyond current levels will be very hard to meet. Assuming that the transition to EVs [electrical vehicles] does take place, the global mining industry will need a capital increase of inbetween US$350 to US$750 billion. But . the capital increase is very concentrated in . copper, nickel and cobalt. . Lithium is an abundant commodity where very little fresh capital is required to supply all the supply that we will need to enable the EV transition. Which equities could suggest the adequate exposure? Being long electrical vehicles further down the value chain comes down, for investors, to response the question as to which player will emerge as the winner in this revolution – the risk being to back the wrong pony. However, by gaining exposure through raw materials, one can eliminate that risk: all producers of the key commodities identified above should benefit through the appreciation of commodity prices.

Equities AB thinks will benefit include a mix of Canada, Australian and United Kingdom companies that trade over the counter in the United States: Ivanhoe Mines (IVPAF) (copper), which also trades in Canada and Germany; mining and commodity-trading play Glencore (GLNCY) (copper, cobalt & nickel); Very first Quantum Minerals (FQVLF) (copper, nickel); Clean TeQ Holdings (CTEQF) (non-covered, nickel & cobalt) and Syrah Resources (SYAAF) (non-covered, graphite).

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