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How Metals Prices Performed in 2021

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Metals prices returns 2021

How Metals Prices Performed in 2021

Looking back on what gave investors strong returns in 2021, it was the year of industrial and energy metals.

As demand for industrial goods surged, so too did their material metals. But unlike energy prices which rose across the board last year, not all metals managed positive returns.

This infographic looks at the year-over-year return on metals prices from January 1 to December 31 of 2021, using pricing data tracked by Tradingeconomics.com.

Inflation and Raw Material Demand Spur Industrial Metals

Last year saw inflation hit 30-year highs as the world’s reopening resulted in unprecedented demand for base and energy metals.

Essential materials for electric vehicle (EV) battery production like lithium and cobalt were among the top performers as EV sales continued to grow in 2021.

MetalAnnual Return in 2021
Lithium496.7%
Magnesium207.6%
Cobalt115.2%
Tin93.6%
Molybdenum90.4%
Neodynium78.3%
Aluminum38.3%
Indium32.3%
Germanium31.7%
Gallium31.6%
Nickel29.4%
Zinc28.1%
Copper26.8%
Lead14.8%
Steel7.7%
Manganese7.2%
Gold-3.5%
Platinum-10.4%
Silver-11.5%
Rhodium-20.5%
Palladium-22.0%
Iron ore-24.0%

Source: Tradingeconomics.com

Magnesium was another top performer last year, as skyrocketing coal prices impacted the metal, which uses coal as part of the feedstock in the smelting process. In addition, concerns over production suspensions in China for environmental reasons spurred magnesium prices further amidst potential shortage fears.

Iron ore was the only base metal with negative returns, with demand largely curbed by China’s slowing growth and pledge to reduce steel output in May of last year.

Lithium and Other EV Metals Outperform

Last year saw major automakers like Ford and GM commit themselves to all new car sales being zero emission by 2040, spurring an 80% rise in electric vehicle sales in 2021.

As a result, essential battery metals like lithium, cobalt, lead, and nickel were all in high demand as automakers secured these essential materials for their battery production.

The start of 2022 has also seen more positive catalysts for nickel specifically, as Tesla secured a supply deal with Talon Metals for 75,000 tonnes of nickel concentrate over six years.

PGM Prices Falter

Palladium and platinum had strong starts in the first half of the year as well, but chip shortages resulted in a slowdown in automotive production and a drop in demand for the two metals.

Both of these key platinum group metals (PGMs) finished 2021 with double-digit drawdowns, with platinum returning -10.4% and palladium returning -22.0%.

Metals analysts are mixed on whether the two metals (primarily used in automotive catalytic converters) will see a recovery in demand, which would be led by easing chip shortages and supply chain issues.

Gold and Silver Struggle to Hold Value

As the world focused on securing the necessary raw materials for the clean energy transition, gold and silver lagged behind.

Although both precious metals wavered as stores of value, returning -3.5% and -11.5% respectively, bullion sales from the U.S. mint rose by 48.4% compared to 2020.

Despite gold’s underwhelming performance while equities, cryptocurrencies, and other commodities surged, upcoming forecasted rate hikes have historically spurred reversals for the precious metal.

As 2022 has started with equity prices slumping, a potential flight to the safety of hard assets and the continuous demand for raw materials needed for the clean energy transition could set up a positive 2022 for metals.

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Misc

Mapped: Countries With the Highest Flood Risk

Recent floods in Pakistan have affected more than 33 million people. Where is the risk of flooding highest around the world?

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PopulationFloodRisk_MainGraphicOption2_1200px

Risk of Flooding Mapped Around the World

Devastating floods across Pakistan this summer have resulted in more than 1,400 lives lost and one-third of the country being under water.

This raises the question: which nations and their populations are the most vulnerable to the risk of flooding around the world?

Using data from a recent study published in Nature, this graphic maps flood risk around the world, highlighting the 1.81 billion people directly exposed to 1-in-100 year floods. The methodology takes into account potential risks from both inland and coastal flooding.

Asian Countries Most at Risk from Rising Water Levels

Not surprisingly, countries with considerable coastlines, river systems, and flatlands find themselves with high percentages of their population at risk.

The Netherlands and Bangladesh are the only two nations in the world to have more than half of their population at risk due to flooding, at 59% and 58%, respectively. Vietnam (46%), Egypt (41%), and Myanmar (40%) round out the rest of the top five nations.

Besides the Netherlands, only two other European nations are in the top 20 nations by percentage of population at risk, Austria (18th at 29%) and Albania (20th at 28%).

RankCountryFlood risk, by population exposed (%)Total population exposed
#1๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands58.7%10,100,000
#2๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh57.5%94,424,000
#3๐Ÿ‡ป๐Ÿ‡ณ Vietnam46.0%45,504,000
#4๐Ÿ‡ช๐Ÿ‡ฌ Egypt40.5%38,871,000
#5๐Ÿ‡ฒ๐Ÿ‡ฒ Myanmar39.9%19,104,000
#6๐Ÿ‡ฑ๐Ÿ‡ฆ Laos39.7%2,985,000
#7๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia38.1%7,431,000
#8๐Ÿ‡ฌ๐Ÿ‡พ Guyana37.9%276,000
#9๐Ÿ‡ธ๐Ÿ‡ท Suriname37.7%233,000
#10๐Ÿ‡ฎ๐Ÿ‡ถ Iraq36.8%16,350,000
#11๐Ÿ‡น๐Ÿ‡ญ Thailand33.9%25,431,000
#12๐Ÿ‡ธ๐Ÿ‡ธ South Sudan32.5%5,437,000
#13๐Ÿ‡ต๐Ÿ‡ฐ Pakistan31.1%71,786,000
#14๐Ÿ‡ณ๐Ÿ‡ต Nepal29.4%11,993,000
#15๐Ÿ‡จ๐Ÿ‡ฌ Republic of the Congo29.3%1,170,000
#16๐Ÿ‡ต๐Ÿ‡ญ Philippines29.0%30,483,000
#17๐Ÿ‡ฏ๐Ÿ‡ต Japan28.7%36,060,000
#18๐Ÿ‡ฆ๐Ÿ‡น Austria27.8%2,437,000
#19๐Ÿ‡ฎ๐Ÿ‡ณ India27.7%389,816,000
#20๐Ÿ‡ฆ๐Ÿ‡ฑ Albania27.6%771,000
#21๐Ÿ‡จ๐Ÿ‡ณ China27.5%394,826,000
#22๐Ÿ‡น๐Ÿ‡ฉ Chad27.4%4,547,000
#23๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia27.0%75,696,000
#24๐Ÿ‡ญ๐Ÿ‡ท Croatia26.9%1,094,000
#25๐Ÿ‡ธ๐Ÿ‡ฐ Slovakia26.7%1,401,000

The Southeast Asia region alone makes up more than two-thirds of the global population exposed to flooding risk at 1.24 billion people.

China and India account for 395 million and 390 million people, respectively, with both nations at the top in terms of the absolute number of people at risk of rising water levels. The rest of the top five countries by total population at risk are Bangladesh (94 million people at risk), Indonesia (76 million people at risk), and Pakistan (72 million people at risk).

How Flooding is Already Affecting Countries Like Pakistan

While forecasted climate and natural disasters can often take years to manifest, flooding affected more than 100 million people in 2021. Recent summer floods in Pakistan have continued the trend in 2022.

With 31% of its population (72 million people) at risk of flooding, Pakistan is particularly vulnerable to floods.

In 2010, floods in Pakistan were estimated to have affected more than 18 million people. The recent floods, which started in June, are estimated to have affected more than 33 million people as more than one-third of the country is submerged underwater.

The Cost of Floods Today and in the Future

Although the rising human toll is by far the biggest concern that floods present, they also bring with them massive economic costs. Last year, droughts, floods, and storms caused economic losses totaling $224.2 billion worldwide, nearly doubling the 2001-2020 annual average of $117.8 billion.

A recent report forecasted that water risk (caused by droughts, floods, and storms) could eat up $5.6 trillion of global GDP by 2050, with floods projected to account for 36% of these direct losses.

As both human and economic losses caused by floods continue to mount, nations around the world will need to focus on preventative infrastructure and restorative solutions for ecosystems and communities already affected and most at risk of flooding.

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How Is Aluminum Made?

Aluminum is one of the world’s most widely used metals, but producing it is a complex process. Here’s a look at where it comes from.

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how is aluminum made?

How is Aluminum Made?

Aluminum is one of our most widely-used metals, found in everything from beer cans to airplane parts.

However, the lightweight metal doesnโ€™t occur naturally, and producing it is a complex process.

The above infographics use data from the USGS, Aluminium Leader, and other sources to break down the three stages of aluminum production.

The Three Stages of Aluminum Production

Each year, the world produces around 390 million tonnes of bauxite rock, and 85% of it is used to make aluminum.

Bauxites are rocks composed of aluminum oxides along with other minerals and are the worldโ€™s primary source of aluminum. After mining, bauxite is refined into alumina, which is then converted into aluminum.

Therefore, aluminum typically goes from ore to metal in three stages.

Stage 1: Mining Bauxite

Bauxite is typically extracted from the ground in open-pit mines, with just three countriesโ€”Australia, China, and Guineaโ€”accounting for 72% of global mine production.

Country2021 Mine Production of Bauxite (tonnes)% of Total
Australia ๐Ÿ‡ฆ๐Ÿ‡บ110,000,00028.2%
China ๐Ÿ‡จ๐Ÿ‡ณ86,000,00022.1%
Guinea ๐Ÿ‡ฌ๐Ÿ‡ณ85,000,00021.8%
Brazil ๐Ÿ‡ง๐Ÿ‡ท32,000,0008.2%
India ๐Ÿ‡ฎ๐Ÿ‡ณ22,000,0005.6%
Indonesia ๐Ÿ‡ฎ๐Ÿ‡ฉ18,000,0004.6%
Russia ๐Ÿ‡ท๐Ÿ‡บ6,200,0001.6%
Jamaica ๐Ÿ‡ฏ๐Ÿ‡ฒ5,800,0001.5%
Kazakhstan ๐Ÿ‡ฐ๐Ÿ‡ฟ5,200,0001.3%
Saudi Arabia ๐Ÿ‡ธ๐Ÿ‡ฆ4,300,0001.1%
Rest of the World ๐ŸŒ15,500,0004.0%
Total390,000,000100.0%

Australia is by far the largest bauxite producer, and itโ€™s also home to the Weipa Mine, the biggest bauxite mining operation globally.

Guinea, the third-largest producer, is endowed with more than seven billion tonnes of bauxite reserves, more than any other country. Additionally, Guinea is the top exporter of bauxite globally, with 76% of its bauxite exports going to China.

After bauxite is out of the ground, it is sent to refineries across the globe to make alumina, marking the second stage of the production process.

Stage 2: Alumina Production

In the 1890s, Austrian chemist Carl Josef Bayer invented a revolutionary process for extracting alumina from bauxite. Todayโ€”over 100 years laterโ€”some 90% of alumina refineries still use the Bayer process to refine bauxite.

Here are the four key steps in the Bayer process:

  1. Digestion:
    Bauxite is mixed with sodium hydroxide and heated under pressure. At this stage, the sodium hydroxide selectively dissolves aluminum oxide from the bauxite, leaving behind other minerals as impurities.
  2. Filtration:
    Impurities are separated and filtered from the solution, forming a residue known as red mud. After discarding the mud, aluminum oxide is converted into sodium aluminate.
  3. Precipitation:
    The sodium aluminate solution is cooled and precipitated into a solid, crystallized form of aluminum hydroxide.
  4. Calcination:
    The aluminum hydroxide crystals are washed and heated in calciners to form pure aluminum oxideโ€”a sandy white material known as alumina.

The impurities or red mud left behind in the alumina production process is a major environmental concern. In fact, for every tonne of alumina, refineries produce 1.2 tonnes of red mud, and there are over three billion tonnes of it stored in the world today.

China, the second-largest producer and largest importer of bauxite, supplies more than half of the worldโ€™s alumina.

Country2021 alumina production (tonnes)% of total
China ๐Ÿ‡จ๐Ÿ‡ณ74,000,00053%
Australia ๐Ÿ‡ฆ๐Ÿ‡บ21,000,00015%
Brazil ๐Ÿ‡ง๐Ÿ‡ท11,000,0008%
India ๐Ÿ‡ฎ๐Ÿ‡ณ6,800,0005%
Russia ๐Ÿ‡ท๐Ÿ‡บ3,100,0002%
Germany ๐Ÿ‡ฉ๐Ÿ‡ช1,900,0001%
Ireland ๐Ÿ‡ฎ๐Ÿ‡ช1,900,0001%
Saudi Arabia ๐Ÿ‡ธ๐Ÿ‡ฆ1,800,0001%
Ukraine ๐Ÿ‡บ๐Ÿ‡ฆ1,700,0001%
Spain ๐Ÿ‡ช๐Ÿ‡ธ1,600,0001%
Rest of the World ๐ŸŒ15,100,00011%
Total139,900,000100%

Several major producers of bauxite, including Australia, Brazil, and India, are among the largest alumina producers, although none come close to China.

Alumina has applications in multiple industries, including plastics, cosmetics, and chemical production. But of course, the majority of it is shipped to smelters to make aluminum.

Stage 3: Aluminum Production

Alumina is converted into aluminum through electrolytic reduction. Besides alumina itself, another mineral called cryolite is key to the process, along with loads of electricity. Hereโ€™s a simplified overview of how aluminum smelting works:

  1. In aluminum smelter facilities, hundreds of electrolytic reduction cells are filled up with molten cryolite.
  2. Alumina (composed of two aluminum atoms and three oxygen atoms) is then dumped into these cells, and a strong electric current breaks the chemical bond between aluminum and oxygen atoms.
  3. The electrolysis results in pure liquid aluminum settling at the bottom of the cell, which is then purified and cast into its various shapes and sizes.

China dominates global aluminum production and is also the largest consumer. Its neighbor India is the second-largest producer, making only a tenth of Chinaโ€™s output.

Country2021 Aluminum Smelter Production (tonnes)% of total
China ๐Ÿ‡จ๐Ÿ‡ณ39,000,00059%
India ๐Ÿ‡ฎ๐Ÿ‡ณ3,900,0006%
Russia ๐Ÿ‡ท๐Ÿ‡บ3,700,0006%
Canada ๐Ÿ‡จ๐Ÿ‡ฆ3,100,0005%
United Arab Emirates ๐Ÿ‡ฆ๐Ÿ‡ช2,600,0004%
Australia ๐Ÿ‡ฆ๐Ÿ‡บ1,600,0002%
Bahrain ๐Ÿ‡ง๐Ÿ‡ญ1,500,0002%
Iceland ๐Ÿ‡ฎ๐Ÿ‡ธ880,0001%
U.S. ๐Ÿ‡บ๐Ÿ‡ธ880,0001%
Rest of the World ๐ŸŒ9,400,00014%
Total66,560,000100%

As is the case for alumina production, some of the countries that produce bauxite and alumina also produce aluminum, such as India, Australia, and Russia.

Roughly a quarter of annually produced aluminum is used by the construction industry. Another 23% goes into vehicle frames, wires, wheels, and other parts of the transportation industry. Aluminum foil, cans, and packaging also make up another major end-use with a 17% consumption share.

Aluminumโ€™s widespread applications have made it one of the most valuable metal markets. In 2021, the global aluminum market was valued at around $245.7 billion, and as consumption grows, itโ€™s projected to nearly double in size to $498.5 billion by 2030.

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