Energy
The Periodic Table of Commodity Returns
The Periodic Table of Commodity Returns
If for some reason, you still think that the commodity markets are predictable, today’s chart provides a nice piece of humble pie.
The Periodic Table of Commodity Returns, which comes to us annually from our friends at U.S. Global Investors, shows the returns of commodities over each year of the past decade.
As you may have guessed, commodities are a volatile asset class – and as a result, their respective rankings fluctuate wildly each year, making things really interesting for any observer.
The Year in Review
In 2017, we experienced the second full year of recovery from the collapse of commodities that plagued the dreaded stretch from 2011 to 2015.
Aside from natural gas (-20.7%), commodities were basically up across the board. The graphic, which focuses mostly on major commodity markets, has palladium (56.3%), aluminum (32.4%), coal (31.2%), copper (30.5%), and zinc (30.5%) as the big winners over the last year.
It’s worth mentioning that some smaller markets are not included on the table – and battery metals like cobalt (133%) also did exceptionally well in 2017.
Deeper Digging
If you are not yet thoroughly geeked out, there is an interactive version of this graphic as well. It allows you to sort by category, performance, or volatility.
Surprisingly, the least volatile substance on the table is gold:
While the gold market has been eerily quiet as of late, this is unexpected. That’s because, at least compared to other financial assets like bonds or stocks, gold has quite the reputation for being volatile and risky.
But, when compared to other commodities, gold actually appears relatively tame.
What Real Volatility Looks Like
Here are the charts for natural gas and coal, each which much better represent a Dr. Jekyll / Mr. Hyde relationship.
Natural gas is in weird place.
It’s a better alternative than coal or oil for emissions, but it’s still a fossil fuel. This, along with the natural ebbs and flows of the oil and gas markets, have made gas particularly volatile over the last few years.
Of course, coal is falling out of favor in the long-term global energy mix – but that doesn’t mean it can’t get a shot in the arm from Chinese or Indian demand in the short term.
As a result, coal is all over the map on the Periodic Table of Commodity Returns, as well.
Energy
Charted: 4 Reasons Why Lithium Could Be the Next Gold Rush
Visual Capitalist has partnered with EnergyX to show why drops in prices and growing demand may make now the right time to invest in lithium.
4 Reasons Why You Should Invest in Lithium
Lithium’s importance in powering EVs makes it a linchpin of the clean energy transition and one of the world’s most precious minerals.
In this graphic, Visual Capitalist partnered with EnergyX to explore why now may be the time to invest in lithium.
1. Lithium Prices Have Dropped
One of the most critical aspects of evaluating an investment is ensuring that the asset’s value is higher than its price would indicate. Lithium is integral to powering EVs, and, prices have fallen fast over the last year:
Date | LiOH·H₂O* | Li₂CO₃** |
---|---|---|
Feb 2023 | $76 | $71 |
March 2023 | $71 | $61 |
Apr 2023 | $43 | $33 |
May 2023 | $43 | $33 |
June 2023 | $47 | $45 |
July 2023 | $44 | $40 |
Aug 2023 | $35 | $35 |
Sept 2023 | $28 | $27 |
Oct 2023 | $24 | $23 |
Nov 2023 | $21 | $21 |
Dec 2023 | $17 | $16 |
Jan 2024 | $14 | $15 |
Feb 2024 | $13 | $14 |
Note: Monthly spot prices were taken as close to the 14th of each month as possible.
*Lithium hydroxide monohydrate MB-LI-0033
**Lithium carbonate MB-LI-0029
2. Lithium-Ion Battery Prices Are Also Falling
The drop in lithium prices is just one reason to invest in the metal. Increasing economies of scale, coupled with low commodity prices, have caused the cost of lithium-ion batteries to drop significantly as well.
In fact, BNEF reports that between 2013 and 2023, the price of a Li-ion battery dropped by 82%.
Year | Price per KWh |
---|---|
2023 | $139 |
2022 | $161 |
2021 | $150 |
2020 | $160 |
2019 | $183 |
2018 | $211 |
2017 | $258 |
2016 | $345 |
2015 | $448 |
2014 | $692 |
2013 | $780 |
3. EV Adoption is Sustainable
One of the best reasons to invest in lithium is that EVs, one of the main drivers behind the demand for lithium, have reached a price point similar to that of traditional vehicle.
According to the Kelly Blue Book, Tesla’s average transaction price dropped by 25% between 2022 and 2023, bringing it in line with many other major manufacturers and showing that EVs are a realistic transport option from a consumer price perspective.
Manufacturer | September 2022 | September 2023 |
---|---|---|
BMW | $69,000 | $72,000 |
Ford | $54,000 | $56,000 |
Volkswagon | $54,000 | $56,000 |
General Motors | $52,000 | $53,000 |
Tesla | $68,000 | $51,000 |
4. Electricity Demand in Transport is Growing
As EVs become an accessible transport option, there’s an investment opportunity in lithium. But possibly the best reason to invest in lithium is that the IEA reports global demand for the electricity in transport could grow dramatically by 2030:
Transport Type | 2022 | 2025 | 2030 |
---|---|---|---|
Buses 🚌 | 23,000 GWh | 50,000 GWh | 130,000 GWh |
Cars 🚙 | 65,000 GWh | 200,000 GWh | 570,000 GWh |
Trucks 🛻 | 4,000 GWh | 15,000 GWh | 94,000 GWh |
Vans 🚐 | 6,000 GWh | 16,000 GWh | 72,000 GWh |
The Lithium Investment Opportunity
Lithium presents a potentially classic investment opportunity. Lithium and battery prices have dropped significantly, and recently, EVs have reached a price point similar to other vehicles. By 2030, the demand for clean energy, especially in transport, will grow dramatically.
With prices dropping and demand skyrocketing, now is the time to invest in lithium.
EnergyX is poised to exploit lithium demand with cutting-edge lithium extraction technology capable of extracting 300% more lithium than current processes.
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