Via Metal Miner
The Renewables MMI (Monthly Metals Index) dropped by 5.47% from December to January. Overall, renewable energy materials and battery metals experienced a somewhat bullish Q4. However, weak demand within China weighed heavily on metals like lithium and copper, and many market analysts expect the incoming Trump administration to place additional bearish sentiment on renewable energy initiatives.
In October 2024, Rio Tinto agreed to acquire Arcadium Lithium for $6.7 billion. This clearly reflects significant confidence in the long-term demand for lithium, mainly driven by industrial electrification and the global shift toward electric vehicles.
The move comes despite lithium prices dropping steadily in 2024. In general, lithium remains oversupplied in certain parts of the globe, mainly due to Chinese stockpiling. However, lithium still has a long-term bullish overall outlook due to the ongoing push for green energy.
The cobalt market continues to grapple with challenges stemming from oversupply. For example, the opening of the Kisanfu mine by Chinese mining companies in the Democratic Republic of Congo, along with increased production from other Chinese mining operations, have driven prices downward.
In the long term, cobalt will continue to face bearish pressure unless stockpiles of the metal deplete significantly. As one of the most important battery metals, any major changes could have major repercussions.
China’s position as a leading consumer in the metals market plays a significant role in shaping global demand and prices, particularly for steel and copper. However, recent predictions suggest an ongoing downturn in China’s steel consumption. This includes an expected 4.4% decline in 2024 and an anticipated 1.5% drop in 2025.
Moreover, many predict that China’s demand for copper will hit its highest point by 2030, with growth slowing sharply in the years leading up to that. Experts currently predict a steady drop in yearly growth from 2023 onward, primarily due to changes in China’s economy and efforts to use less copper in key industries.
Copper is essential to renewable energy infrastructure. As a result, both demand and pricing remain crucial to the sector’s growth. A decline in China’s copper consumption might boost global supply, potentially stabilizing or lowering prices at least temporarily. Despite this, most experts anticipate that the worldwide shift toward renewable energy will serve to maintain somewhat strong copper demand.
