As 2020 winds up, Stockhead has reached out to its pool of contributing consultants for his or her view on what they hope 2021 will convey. In the present day’s query is: Which commodities will see demand and powerful value rises in 2021 and why?
Man Le Web page – RM Capital
Nickel: US$18,000 by late CY 2021. Excessive demand for sulphide derived Ni with Enhance in use in EV from 3-12% over subsequent 5 years leading to a deficit of between 50-60t tonnes by 2025.
Uranium: US$45/lb by late CY 2021. Shorter-term issues over COVID-19 and ensuing provide cutbacks and extra beneficial provide and demand fundamentals. Trade consensus that the demand image has improved considerably lately whereas extra provide constraint is going down by producers.
Niv Dagan – Peak Asset Administration
We anticipate gold costs to surpass $2,500 USD in 2021 – largely pushed by USD weak point and rising inflation. This can see a “commodities growth” as iron ore, copper, nickel and silver observe swimsuit. Uranium can be in focus, following a big push by governments to shift in the direction of “emission free” renewables.
Simon Popple – Brookville Capital
Silver – it’s nonetheless a great distance from its all time highs.
Hedley Widdup – Lion Choice Group
Gold. If this bull marketplace for gold is something like earlier bull markets, then anticipate good points inside a 12 months to have the potential to be sturdy double digit proportion numbers.
Luke Winchester – Oracle Funding Administration
Others could have extra perception than me, however for what it’s value I nonetheless like gold and we keep an allocation to a handful of Aussie producers within the Rising Firms portfolio; Saracen Mineral Holdings (ASX:SAR), Ramelius Resources (ASX:RMS), Silver Lake Resources (ASX:SLR).
Like central banks, I can’t see governments placing any hurdles in entrance of the financial restoration with contractionary fiscal insurance policies, and with borrowing prices remaining low, I believe it goes the opposite approach with governments fuelling the restoration with additional massive deficits.
Heath Moss – HLM Investments
Copper, nickel and gold
Donna Warner – Barclay Pearce
Roughly 90% of the world’s provide of uncommon earth minerals are managed by China. It is a important element for the manufacture of digital merchandise.
With an expectation of continued commerce tensions between China and the remainder of the world in 2021, the restriction of uncommon earth exports as a possible political pawn is a chance. This state of affairs would see a spike in costs as patrons search various suppliers comparable to Australian-based miners Lynas (ASX:LYC), RareX (ASX:REE), and American Rare Earths (ASX:ARR).
Josh Gilbert – eToro
We noticed some bullish strikes from gold in Q3 of this 12 months, and it’s anticipated that it’s going to proceed to develop in 2021. Not solely is gold used to hedge in opposition to pullbacks within the equities market, nevertheless it’s additionally used in opposition to a weakened greenback. With stimulus packages anticipated on the finish of 2020 or early 2021, this may solely weaken the greenback additional.
We might also see traders go risk-off and spend money on gold as a safer funding, somewhat than selecting risky shares.
Tim Buckley – Institute for Vitality Economics and Monetary Evaluation
Uncommon earth, lithium, cobalt and various battery/electrical automobile commodities will see big demand progress projections of markets doubling, after which doubling once more globally, spurring a provide response – suppose what number of Tesla mega factories are going to be added.
However beware China’s propensity to drive up provide forward of demand progress, usually leading to decrease commodity costs – usually a case of profitless prosperity, and repeatedly giving Chinese language companies enjoying the lengthy sport the chance to achieve management of improvement initiatives struggling a cash-squeeze.
I’d speculate that we’d see a variety of curiosity within the inexperienced ammonia area in Australia – suppose Incitec.
Raas (Finola Burke, John Burgess, Melinda Moore, Andrew Williams)
Crude oil is now a COVID sentiment pushed commodity (regardless of the weak fundamentals), however persons are suckers for going for a drive. Maybe crude oil might be seen as a proxy (lead indicator) of financial restoration?
Gasoline (LNG) though can’t be change traded immediately, however all the trade has reduce on infield expense – not simply exploration drilling, however the naked minimal decline mitigation funding and that may solely result in provide tightness… rising demand/constrained provide can solely result in one factor – fuel costs going up.
Gavin Wendt – MineLife
Valuable metals – gold, silver, palladium – ought to all do properly. Base metals – copper, nickel, zinc – also needs to do properly.
James Whelan – VFS Group
The views, data, or opinions expressed within the interviews on this article are solely these of the interviewees and don’t symbolize the views of Stockhead. Stockhead doesn’t present, endorse or in any other case assume duty for any monetary product recommendation contained on this article.