Market news

11 August 2021

Surging demand for renewables will boost these 3 metals - analysts

CNBC reports that in the opinion of Wood Mackenzie, a transition to renewable sources of energy will prompt a surge in demand for base metals in the coming years.

Analysts at the energy consultancy said that as governments fulfil commitments to limit global warming, a growing reliance on solar power would boost demand for several non-ferrous metals.

Three metals in particular were named by Wood Mackenzie as commodities to watch: aluminum, copper and zinc.

The report’s authors outlined three possible scenarios for the metals, with demand growth for each depending on the success of international efforts to limit global warming.

Aluminum

Wood Mackenzie’s base case scenario assumes that by the end of the century, temperatures will have risen by 2.8 to 3 degrees Celsius from pre-industrial times.

In this situation, aluminum demand from the solar power sector would rise from 2.4 million tons in 2020 to 4.6 million tons in 2040.

Copper

Demand for copper — used in high and low voltage transmission cables and thermal solar collectors — is also set for “notable gains” as solar energy becomes more mainstream, Wood Mackenzie said.

The report’s base case scenario predicted that demand for copper arising from solar power generation would rise from 0.4 million tons in 2020 to 0.7 million tons a year by 2040.

Zinc

Meanwhile, analysts noted that only zinc coatings could offer cheap, long-lasting corrosion protection, with the metal used in solar panels’ structural parts.

Currently, solar power installations account for around 0.4 million tons of annual global zinc consumption, Wood Mackenzie said.

If global temperatures were on track to rise by 2.8 to 3 degrees Celsius by the end of this century, this number was projected to grow to 0.8 million tons by 2040.

Wood Mackenzie’s predictions for the three metals were only around demand coming from the solar power industry, and did not speculate on total global demand.

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