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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

The State of Copper Recycling in the U.S.

This graphic explores how recycling copper can help address the demand for the metal in the U.S.

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The State of Copper Recycling in the U.S.

Copper is essential for a low-carbon economy due to its crucial role in renewable energy technologies.

As a result, many worry that a lack of the metal used in wires and batteries can hurt a transition to a green economy.

In this graphic, our sponsor, the Copper Development Association, explores how recycling can address the demand for copper.

Copper Scrap Recycled in the U.S.

In 2022, the total copper scrap recycled in the U.S. was approximately 830,000 tonnes, equivalent to 32% of the total U.S. copper supply for the same period. Around 670,000 tonnes (81%) originated from pre-consumer sources generated during manufacturing operations, while 160,000 tonnes (19%) came from post-consumer sources, such as obsolete products.

Brass and wire-rod mills accounted for the majority of the copper recycled from scrap (85%). Additionally, smelters, refiners, and ingot makers make 10% and chemical plants, foundries, and other manufacturers around 5%.

Copper from Scrap2022 Content (tonnes)
Brass and wire-rod mills650,000 t
Smelters and refiners40,000 t
Ingot makers39,500 t
Foundries, Other40,000 t

Despite the rising demand for copper, the U.S. predominantly exports its copper scrap.

In 2022, the U.S. exported half of the 1,569,000 tonnes of the copper content generated from scrap. This export trend persisted because, until recent years, the country lacked operating secondary copper smelters capable of processing complex scrap grades into furnace-ready raw materials.

However, reshoring this metal presents an opportunity for the country.

Tapping into the Urban Mine

North America currently has about 86 million tonnes (Mt) of copper in use, known as the Urban Mine. This copper will become available for recycling as aging infrastructure and products reach the end of their service lives:

  • Buildings: 45.4 Mt
  • Infrastructure: 16.1 Mt
  • Consumer Products: 11.2 Mt
  • Transport: 8.5 Mt
  • Industrial Uses: 4.8 Mt

Increased secondary smelting and refining capacity is a crucial building block for a more resilient and self-sufficient U.S. copper supply chain.

In response to the growing need for copper, the U.S. plans to add over 280,000 tonnes of secondary smelting and refining capacity in the next few years. This expansion will enable the country to process more complex scrap grades domestically.

Given that copper products can last for decades, creating a lag time before the material becomes available for recycling, primary production will continue to play an important role in meeting the increasing needs in the U.S.

The Copper Development Association (CDA) brings the value of copper and its alloys to society to address the challenges of today and tomorrow. Visit www.copper.org to learn more about why copper is a critical mineral.

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Why Copper Is Critical for Data Centers

Copper consumption for data centers in North America is estimated to jump from 197,000 tonnes in 2020 to 238,000 tonnes in 2030.

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Copper’s Critical Role in Data Centers

Why Copper Is Critical for Data Centers

Data centers are computer server hubs that collect, store, and process large amounts of data, requiring extensive network infrastructure and electric power supply.

As the North American data center market grows, copper will be a key building block in this infrastructure.

This infographic from the Copper Development Association illustrates the critical role of copper in data center development.

Copper in Technology

Much has been said about the growing demand for critical minerals like copper, nickel, and lithium for clean technologies such as batteries, EVs, solar, and wind power.

Copper, however, has a more extensive role in technology as it is used in wires that connect power grids and data centers around the planet.

As one of the best conductors of electricity, copper maximizes efficiency in the transmission and distribution of electricity. Its thermal conductivity also helps build efficient heat exchangers, which are vital for cooling in data centers.

The inherent ductility and malleability of copper make it ideal for shaping into compact system components, like electrical connectors. In addition, copper can be fully recycled without losing any beneficial properties, providing an excellent solution in a growing green economy.

Data centers use copper across various electrical applications, including:

  • Power cables
  • Busbars
  • Electrical connectors
  • Heat exchangers and sinks
  • Power distribution strips

To put the demand into perspective, Microsoft’s $500 million data center in Chicago required 2,177 tonnes of copper for construction.

North America’s Growing Need for Copper

With the rise of cloud computing and the Internet of Things (IoT), the North American data center market is expanding.

North American data center infrastructure is expected to grow from a $33 billion business in 2020 to $70 billion in 2030 and $185 billion in 2040.

This, in turn, will amplify the demand for copper. Copper consumption for data centers is estimated to jump from 197,000 tonnes in 2020 to 238,000 tonnes in 2030 and 293,000 tonnes in 2040.

The Copper Development Association (CDA) brings the value of copper and its alloys to society to address the challenges of today and tomorrow. Visit www.copper.org to learn more about copper’s critical role in data centers.

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