How do I see the next year and have includedcomments from a real investor that has more information than myself.
How will 2023 look forcommodities broadly? Which metals will outperform? Should you focus onproducers or exploration stocks?
There was crude oil whichcontinued its strong run from 2021…not surprising, really, given OPEC’sreluctance to increase oil output despite pressure from the US.
Crude oil makes a lot ofmoney for foreign companies including Russia and America including oilproducers, why do you think we cant get pass Lithium being important till endof year?
Did anyone see the lithium rise coming?
Very few would have predictedthe enormous outperformance of this commodity.
Benchmark MineralIntelligence’s Lithium Index gained almost 150% through 2022.
With recent protests themultiyear lockdown, followed by total loss of control of the virus, which hasspread rapidly among China’s 1.4 billion population, President Xi Jinping hashit a political low in his popularity.
Expect to see every measurepossible as he tries to regain confidence among the populace. Stimulus packageswill be his most important weapon.
This will be a boon for copper,coal, and iron ore.
Has anyone looked at the chartsfor coal production and the shares market about this?
Right now, the EV market isstill very much in a multiyear uptrend.
According to BenchmarkIntelligence, there are more than threehundred gigafactories under construction across Asia, Europe, and the US.
What is a gigafactory, youmight ask? It is a name designated to the giant manufacturing plants being builtto mass produce electric vehicle (EV) batteries.
Why is that important?
The construction of thesefactories is tangible proof that the global economy is committed torebuilding a global fleet of passenger cars using the Li-ion batterytechnology.
No longer is this just someenvironmental ideology or far-flung idea set to take place in 10 or 20 years.
It’s these industrial-scalegigafactories which give manufacturers the capacity to bring EVs to the masses.
The world’s largest carmanufacturers, from Tesla, Hyundai, Toyota, Ford, and BMW, among others, havecommitted themselves to electric far more rapidly than most anticipated.
This has been the catalyst fora surge in lithium stocks in 2022.
Yet the market has been asleepto other minerals needed in battery manufacturing.
Cobalt, rare earths, nickel,and copper will all perform well.
However, there’s one mineral inparticular that might repeat lithium’s 2022 performance (or even exceed it)thanks to strong demand and far greater supply constraints…battery-grade graphite.
Graphite is the premium productfor EV battery anodes.
Yet, it might surprise you thatdespite graphite falling in the shadows of lithium’s popularity last year, moregraphite is needed in an EV battery (by weight) than any other mineral.
It is astounding…Li-ionbatteries need more graphite than lithium!
Yet where will manufacturerssource all this anode material?
Unlike lithium, graphiteproducers have not been the beneficiary of enormous investor capital overrecent years.
While lithium explorers haveunlocked vast new reserves, suitable graphite deposits remain scarce.
Lithium production is set toramp up in a big way over the next two years, thanks to new discoveries acrossChile, Argentina, Canada, and Australia.
But a crisis looms for vehiclemanufacturers in sourcing similar quantities of graphite.
What’s more, the world’s supplyof this important mineral is almost exclusively restricted to China.
Benchmark Intelligence statesthat China was the world’s largest graphite producer in 2021, with 820,000metric tons (MT)…according to the US Geological Survey, the country accountedfor 79% of world graphite mining in 2021.
That is a dominating statistic and a key reason global manufacturers should be worried about future graphite supply.
Lack of supply coupled withconcentrated risk is made worse through China’s highly polluting techniques forpurifying graphite products in the EV market.
Widespread contamination of itsriver systems has been accepted by the world’s ‘green’ vehicle manufacturers.
But this cannot last.
Consumers will demand ethicallysourced raw materials as part of the ‘green agenda’ in transitioning torenewable energies. This will place even greater pressure on this criticalmineral, particularly when you consider that demand for battery-grade graphiteis set to see a sevenfoldincrease over the coming years…that is according to Benchmark Intelligence In my mind, the construction of 300 gigafactories was the catalyst for 2022’s exuberance for lithium stocks.
But graphite continues tobe overlooked…I think this will change in 2023…let’s wait and see as I believeas we advance with EV’s then LITHIUM will soon be the most traded community abovecoal..
Many of these comments comefrom an intelligent advisor with my added comments in large format by me.IMO as always
(20min delay)