Commodity markets are grappling with supply shocks, overpricing and logistical issues…
Benedikt Sobotka, CEO of Eurasian Resources Group, said on April 25 that because the world has had little investment in mining the metals needed for the energy transition for many years, supply and employment shocks High anchor energy prices will continue to push commodity prices higher. Along with many of the logistics problems caused by the Covid-19 epidemic and the need for transparency in sustainability, these factors combine to create a “perfect storm” in the commodity market, he said. at the Global Markets Forum hosted by Reuters in Davos.
According to Mr. Sobotka, a commodity super cycle has begun and will last for the next 30 years, in which he predicts a 20% increase in the price of copper by the end of 2022. The CEO of Eurasian Resources Group believes that the world will turn back. The return to fossil fuels is temporary, and the transition to a low-carbon economy cannot be stopped with an expected investment of $50 trillion over the next 30 years.
Amid escalating prices and huge supply chain pressures, Mr. Sobotka predicts that businesses and countries will gradually stock up on strategic raw materials such as oil, copper, cobalt and more. will need about 200-300 billion USD to invest in the mining industry to meet the demand for energy transition,” he said. Much of this money will be invested in mining copper, nickel, cobalt and other metals.
“If the supply is disrupted just a little bit, you will also see a big price change.” The CEO of Eurasian Resources Group thinks the world will feel the impact in the second half of 2022. End-consumers like the auto industry are trying to negotiate long-term contracts to buy metals like lithium and cobalt at current price.
“This shows how difficult it is for businesses to get a long-term supply of materials, especially clean materials from an ESG point of view,” he said.
Eurasian Resources Group is a global producer and supplier of copper, cobalt, alumina and iron ore, and the only producer of high-quality aluminum in Kazakhstan.