David Rosenberg Commodities
Commodities that are involved in greening the economy will be in high demand while the world transitions to a cleaner future and pursues a “net zero” agenda. This will require significant investment in the commodity space with a secular tailwind behind demand.
While there are those that may question if the world has enough resources to meet this expectation, we will remind them that reserves go up as exploration expands, prices go up (making more difficult reserves economical to exploit), technologies improve, and regulations change. For example, when it came to “peak oil” calls, new technologies (e.g., fracking in the U.S. and horizontal drilling techniques) unlocked reserves that were not economical previously. Those most in demand will be on the metals/mining front, with the World Bank estimating that 3 billion tons will be needed for cleaner energy infrastructure by 2050 — those most essential will be copper, graphite, nickel, lithium and cobalt (aluminum and silver to a lesser degree).
Furthermore, “cleaner” natural gas and uranium (i.e., nuclear power) will be required to help in the energy transition in power generation. Lastly, carbon credits will also become (if not already) a valuable financial commodity needed to meet climate goals.