20th March 2017
Olivier Aeschlimann, Senior Financial Analyst and Fund Manager
The industrialization and urbanization of China were the main sources of growth in metal demand during the decade 2000-10. Since this period of the “super cycle” is over, one could fear a deterioration in the demand for major metals and minerals. However, we believe that the new Chinese model, in particular its orientation towards “green” technologies, represents a much stronger demand than was found with the “super cycle.” For example, the electrification of the automobile does not only boost the demand for lithium. In the longer term, the development of electric vehicles will have a significant impact on copper, nickel, cobalt and graphite. Bernstein (a broker) estimates an additional 20 million tons of demand for copper in order to convert existing cars into their electrical equivalents. Of course, not all cars will become electric, but cars are not the only industry that will be impacted by this trend, which is after all still in its infancy.