(Kitco News) - There is a disconnect between policy makers desire to go green and the amount of critical minerals needed to make it happen, noted Matt Watson, Founder, Precious Metals Commodity Management LLC.
On Thursday Watson recorded an episode of Green Rush with guest Paul Harris, Kitco correspondent.
To compound the problem, the current supply base for these markets is small, resulting in large price swings.
Lithium is a notable example: the metal hit a staggering $80,000 per tonne at its peak, consequently crashing nearly 90% at the start of this year. Commodities are cyclical, but critical minerals have seen the patterns accelerated due to new markets and elevated demand.
"These are relatively low volume markets," said Harris. "Somebody's going to open a new gigafactory, or somebody is going to bring a new mine on stream, and that's going to flood the market with surplus capacity, so the price is going to crash—rinse and repeat."
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