Goldman Sachs — Bull Market for Battery Metals is OVER.
Is the bull market for Battery Metals over? Goldman Sachs thinks so.
Per Quartz, Goldman Sachs predicts automakers will find some relief from metal shortages in the near term, but with the global consumption of battery metals continuing in the long term, that demand is likely to catch up with supply and send metal prices soaring in the future.
This story is related to global commodities and metals, specifically, the supply and demand for Electric Vehicles (EVs) and the nascent Energy Transition.
But knowing the price volatility of these metals is key to understanding the overall issues with the global commodity supercycle.
The most commonly produced battery metals are nickel, cobalt and lithium.
Geopolitically, look no further than what’s happening with China’s Rise and USA Sanctions in order to understand more about what’s happening with metals and the broader global economy.
Though most importantly the current situation of battery metals is linked to what happened on the London Metals Exchange (LME) in March 2022 when the price of nickel hit $100,000 a tonne — forcing the LME to shut down its commodity trading platform.
The metals markets have yet to fully recover from what happened on the LME this year, due to the ongoing Russia-Ukraine conflict and Shanghai lockdowns in China
Many analysts are pointing to the so-called “old economy’s revenge” as a way to understand market forces along with the sharp rise in prices of global commodities across the board.
According to Jeff Currie of the Financial Times,
“the 2000s and ’70s have a lot in common and it’s a whole idea of redistributional policies.”
By this remark, Jeff Currie asserts that the global economy is currently undergoing a third global commodity supercycle since the 1970’s.
He argues that the global economy underwent the same underinvestment theme — i.e., “the revenge of the old economy” —during the late 1960s and early 1970s which meant that poor capital investments in the old economy led to more capital in the new economy.
Watch the full interview with Jeff Currie on the Hidden Forces podcast with Demetri Kofinas.
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