Observers predict boom in commodity prices!Globe article ( April 13 2021)
A big wave for Genm to ride :)))
except :
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Mr. Wowkodaw, however, expects stretched valuations for commodity producers are no reason to turn from an opportunity that could take years to unfold.
Renewed focus on climate change, he argued, is a gamechanger for commodities: “There appears to be growing momentum for a postpandemic ‘green recovery’ funded by targeted government stimulus,” Mr. Wowkodaw said in his report.
He drew from Glencore numbers estimating demand for copper will rise as much as 260 per cent by 2050, compared with 2019. Demand for nickel will rise as much as 375 per cent over the same period.
But the supply of copper, in particular, will eventually lag this demand. Mr. Wowkodaw expects the copper market will be balanced in 2022 and 2023, before structural supply deficits emerge.
“In our view, the industry will require a massive reinvestment in new capacity to meet the supply challenges expected to arrive by the middle of the decade as depletions and grade declines at the world’s existing production base materially erodes output, driving enormous projected deficits beginning in 2025,” he said.
By then, he expects the price of copper will rise to US$4.50 a pound, up from an average of US$4 in 2022 and 2023, and underscoring the investment case for base metals miners. His top picks: First Quantum Minerals Ltd. (FM/Toronto), FreeportMcMoRan (FCX/New York) and Vale SA (VALE/New York).