You're not wrong Ash. Excellent graph.
I hear financial commentators talking about a lack of short term demand, slowdowns, the Chinese economy, and recessions. And how prices for some metals have run too hard. "It's been an excellent year for materials stocks in 2022, but it won't last; it never does" etc. They assume a supply response (under-investment) and demand to stay the same or fall (we've never had anything like this decarbonisation tailwind before).
Yet all the type of data you're looking at, and I've been reading, indicates multi-year chronic shortages and demand that cannot possibly be met. As you say, it takes a very long time from discovery to first production; ten to fifteen years. Politicians are making promises that in reality cannot be kept. I doubt the general public knows the impossibility of the promises being made. The only certainty is high prices.
It's not just future shortages for nickel, copper and aluminium. But also graphite for battery anodes, rare earths for magnets in electric cars and wind turbines. Cobalt to ensure stability and high charge capacity of batteries. And dare l even use the "L" word. I'm still annoyed with myself for not buying PLS when it was hovering around $2 in July or MIN at $40. I was seriously looking at it, but not understanding the market or company at all I stayed away. Even I can't deny the importance of that mineral!
I dislike joining massively crowded trades and stocks/sectors full of traders and short sellers but sometimes the herd is correct. The western world is charging towards a decarbonised world at reckless high speed. I can't see the pace slowing down with all the media and climate action protest pressure. If anything, it seems to be speeding up and resembling a religious fervour. I was trying to explain to an Australian friend in China (a long term resident there) last week just how obsessed with climate and diversity our businesses and governments have become. How it's at the forefront of just about everything. He couldn't grasp it. For this tailwind to subside, just about every politician, Hollywood celebrity, royalty, and large corporation would need to say "we were wrong". The chances of that are zero.
Like you rightly point out, even us dim-witted dumb money investors can see a gravy train rolling past and are keen to jump on board. I think S32 has slipped under the radar to a certain extent because of our lack of lithium exposure and not having iron ore. I wonder if investors realise that our projects tick many of the boxes they're looking at for the decarbonisation theme.
I think a very conservative investor, not looking to delve deeper into minor battery metals or small cap stocks, could do much worse than simply buying S32, and perhaps a high-quality lithium producer and sticking it in their bottom drawer.
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