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These industrial metals won't go down with the rest of the economy

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Despite weaker consumer sentiment as a result of the recent recession, the electric car market is expected to see a healthy rebound in growth, said Neal Brewster, manager of strategy consulting at Roskill.

“Electric vehicle (EV) sales are actually doing pretty well, and I think those will come back much more quickly. I guess we might see governments actually encourage EV sales, so for those particular markets, I’m actually quite bullish, [and see] good drivers longer-term,” Brewster said.

The rise of electric vehicles in the automotive market will bring up demand for battery-intensive metals, Brewster noted, as battery manufacturers shift away from cobalt into nickel.

“In terms of battery technology, we’re seeing a shift towards high nickel-intensity batteries, so our view on nickels is particularly bullish,” he said. “Cobalt will lose share of the market, but it’s a fast-growing market, so [we’ll still see] positive growth year on year.”

Lithium demand is also expected to grow rapidly, Brewster said.

“In terms of lithium, lithium demand could be growing at double digits, so 15% year-on-year, over a number of years. I guess lithium has had a bit of a correction in the last couple of years so if you go back to 2017…we probably saw supply overtaking demand, and that caused quite a floor on prices. That’s now kind of bottomed out,” he said.

As demand picks up, lithium prices should perform strongly over the medium-term, Brewster added.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.