At the end of 2020, Stockhead reached out to their panel of contributing experts for their advice on what they hope 2021 will bring. Today’s question is: Which products will see demand and sharp price increases in 2021 and why?
Guy Le Page – RM Capital
Nickel: US $ 18,000 by end of CY 2021. High demand for Ni sulphide derivative with increasing use of EV by 3-12% over next five years resulting in shortfall of 50-60 tonnes by 2025.
Uranium: US $ 45 / lb by the end of CY 2021. Short-term concerns about COVID-19 and the resulting supply reductions and more favorable supply and demand fundamentals. Industry consensus that the demand situation has improved dramatically in recent years as producers face more supply constraints.
Niv Dagan – Peak Asset Management
We expect the price of gold to exceed $ 2,500 in 2021 – in large part due to the weak US dollar and rising inflation. This will see a “commodity boom” as iron ore, copper, nickel and silver follow. Uranium is also at the center of concerns, following a strong push from governments to switch to “zero emissions” renewable energies.
Simon Popple – Brookville Capital
Silver – it is still far from its highest records.
Hedley Widdup – Lion Selection Group
Gold. If this bullish gold market looks like previous bull markets, expect the gains within a year to have the potential to be solid double-digit percentages.
Luke Winchester – Oracle Investment Management
Others will have more insight than I do, but for what it’s worth, I still love gold and we maintain an allocation to a handful of Australian producers in the emerging portfolio; Saracen Mineral Holdings (ASX: SAR), Ramelius Resources (ASX: RMS), Silver Lake Resources (ASX: SLR).
Like central banks, I do not see governments putting obstacles in the way of economic recovery with shrinking fiscal policies, and with borrowing costs remaining low, I think it goes in the opposite direction with governments fueling the recovery with large new deficits.
Heath Moss – HLM Investments
Copper, nickel and gold
Donna Warner – Barclay Pearce
About 90% of the world’s supply of rare earth minerals is controlled by China. It is an essential component for the manufacture of electronic products.
Pending further trade tensions between China and the rest of the world in 2021, restricting rare earth exports as a potential political pawn is a possibility. This scenario would see prices soar as buyers seek alternative suppliers such as Australian miners Lynas (ASX: LYC), RareX (ASX: REE) and American Rare Earths (ASX: ARR).
Josh Gilbert – eToro
We have seen some bullish moves in gold in the third quarter of this year, and it is expected to continue to grow in 2021. Not only is gold used to hedge against market declines. stocks, but it is also used against a weakened dollar. With stimulus packages expected in late 2020 or early 2021, this will only further weaken the dollar.
We can also see investors taking risks and investing in gold as a safer investment, rather than choosing volatile stocks.
Tim Buckley – Institute for Energy Economics and Financial Analysis
Rare earths, lithium, cobalt and alternative batteries / electric vehicles will see huge growth projections for market demand double, then double again globally, spurring a supply response – think number of Tesla mega factories to be added.
But beware of China’s propensity to push supply up ahead of demand growth, which often leads to lower commodity prices – often a case of profitless prosperity, and regularly gives Chinese companies playing the long game the possibility of taking control of development projects undergoing liquidity squeeze.
I guess we could see a lot of interest in the green ammonia space in Australia – think Incitec.
Raas (Finola Burke, John Burgess, Melinda Moore, Andrew Williams)
Crude oil is now a commodity driven by COVID sentiment (despite weak fundamentals), but people are fond of going for a drive. Maybe crude oil could be seen as an indicator (primary indicator) of economic recovery?
Gas (LNG) cannot be traded directly on the exchange, but the industry as a whole has cut spending on the ground – not just exploration drilling, but the bare minimum of gas mitigation investment. decrease and this can only lead to a scarcity of supply … increasing demand / supply constraint can only lead to one thing: the increase in gas prices.
Gavin Wendt – MineLife
Precious metals – gold, silver, palladium – should all work well. Base metals – copper, nickel, zinc – should also do well.
James Whelan – VFS Group
The views, information or opinions expressed in the interviews in this article are those of the interviewees only and do not represent the views of Stockhead. Stockhead does not provide, endorse, or assume any responsibility for the financial product advice contained in this article.