The Base Metal Boom: The Start of a New Bull Market?
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The Base Metal Boom: The Start of a New Bull Market?

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Base metals are the most fundamental minerals produced for the modern economy, and metals such as copper, zinc, nickel, lead, and aluminum are the key components that support sustained economic growth.

During periods of economic expansion, these are the first materials to support a bustling economy, reducing inventory at metal warehouses and eventually their source, mines.

A Base Metal Boom?

Today’s infographic comes to us from Tartisan Nickel and it takes a look at the surging demand for base metals for use in renewable energy and EVs, and whether this could translate into a sustained bull market for base metals.

The Base Metal Boom: The Start of a New Bull Market?

Over the last three years, prices of base metals have risen on the back of a growing economy and the anticipation of usage in new technologies such as lithium-ion batteries, green energy, and electric vehicles:

Cobalt: +232%
Zinc: +64%
Nickel: +59%
Copper: +45%
Lead: +34%
Tin: +36%
Aluminum: +42%

As goes the success and development of nations, so goes the production and consumption of base metals.

Why Higher Prices?

Development outside of the Western world has been the main driver of the base metal boom, and it will likely continue to push prices higher in the future.

China has been the primary consumer of metals due to the country’s rapid economic expansion – and with recent efforts to improve environmental standards, the country is simultaneously eliminating supplies of low quality and environmentally toxic metal production. India and Africa will also be emerging sources of base metal demand for the coming decades.

But this is not solely a story of developing nations, as there are some key developments that will include the developed world in the next wave of demand for base metals.

New Sources of Demand

Future demand for base metals will be driven by the onset of a more connected and sustainable world through the adoption of electronic devices and vehicles. This will require a turnover of established infrastructure and the obsolescence of traditional sources of energy, placing pressure on current sources of base metals.

The transformation will be global and will test the limits of current mineral supply.

Renewable Energy Technology
The power grids around the world will adapt to include renewable sources such as wind, solar and other technologies. According to the World Energy Outlook (IEA 2017), it is expected that between 2017 to 2040, a total of 160 GW of global power net additions will come from renewables each year.

Renewables will capture two-thirds of global investment in power plants to 2040 as they become, for many countries, the cheapest source of new power generation. Renewables rely heavily on base metals for their construction, and would not exist without them.

Electric Vehicles
Gasoline cars will be fossils. According to the International Energy Agency, the number of electric vehicles on the road around the world will hit 125 million by 2030. By this time, China will account for 39% of the global EV market.

Dwindling Supply

Currently, warehouse levels in the London Metals Exchange are sitting at five-year lows, with tin leading the pack with a decline of 400%.

According to the Commodity Markets Outlook (World Bank, April 2018), supply could be curtailed by slower ramp-up of new capacity, tighter environmental constraints, sanctions against commodity producers, and rising costs. If new supply does not come into the market, this could also drive prices for base metals higher.

New Supply?

There is only one source to replenish supply and fulfill future demand, and that is with mining.

New mines need to be discovered, developed and come online to meet demand. In the meantime, those that invest in the base metals could see scarcity drive prices up as the economy moves towards its electric future on a more populated planet.

An extended base metal boom may very well be on the horizon.

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Energy

Visualizing the Scale of Global Fossil Fuel Production

How much oil, coal, and natural gas do we extract each year? See the scale of annual fossil fuel production in perspective.

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The Scale of Global Fossil Fuel Production

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

Fossil fuels have been our predominant source of energy for over a century, and the world still extracts and consumes a colossal amount of coal, oil, and gas every year.

This infographic visualizes the volume of global fossil fuel production in 2021 using data from BP’s Statistical Review of World Energy.

The Facts on Fossil Fuels

In 2021, the world produced around 8 billion tonnes of coal, 4 billion tonnes of oil, and over 4 trillion cubic meters of natural gas.

Most of the coal is used to generate electricity for our homes and offices and has a key role in steel production. Similarly, natural gas is a large source of electricity and heat for industries and buildings. Oil is primarily used by the transportation sector, in addition to petrochemical manufacturing, heating, and other end uses.

Here’s a full breakdown of coal, oil, and gas production by country in 2021.

Coal Production

If all the coal produced in 2021 were arranged in a cube, it would measure 2,141 meters (2.1km) on each side—more than 2.5 times the height of the world’s tallest building.

China produced 50% or more than four billion tonnes of the world’s coal in 2021. It’s also the largest consumer of coal, accounting for 54% of coal consumption in 2021.

Rank Country2021 Coal Production
(million tonnes)
% of Total
#1🇨🇳 China 4,126.050%
#2🇮🇳 India 811.310%
#3🇮🇩 Indonesia 614.08%
#4🇺🇸 U.S. 524.46%
#5🇦🇺 Australia 478.66%
#6🇷🇺 Russia 433.75%
#7🇿🇦 South Africa 234.53%
#8🇩🇪 Germany 126.02%
#9🇰🇿 Kazakhstan 115.71%
#10🇵🇱 Poland 107.61%
🌍 Other 600.97%
Total8,172.6100%

India is both the second largest producer and consumer of coal. Meanwhile, Indonesia is the world’s largest coal exporter, followed by Australia.

In the West, U.S. coal production was down 47% as compared to 2011 levels, and the descent is likely to continue with the clean energy transition.

Oil Production

In 2021, the United States, Russia, and Saudi Arabia were the three largest crude oil producers, respectively.

Rank Country2021 Oil Production
(million tonnes)
% of Total
#1🇺🇸 U.S. 711.117%
#2🇷🇺 Russia 536.413%
#3🇸🇦 Saudi Arabia 515.012%
#4🇨🇦 Canada 267.16%
#5🇮🇶 Iraq 200.85%
#6🇨🇳 China 198.95%
#7🇮🇷 Iran 167.74%
#8🇦🇪 UAE 164.44%
#9 🇧🇷 Brazil156.84%
#10🇰🇼 Kuwait 131.13%
🌍 Other 1172.028%
Total4221.4100%

OPEC countries, including Saudi Arabia, made up the largest share of production at 35% or 1.5 billion tonnes of oil.

U.S. oil production has seen significant growth since 2010. In 2021, the U.S. extracted 711 million tonnes of oil, more than double the 333 million tonnes produced in 2010.

Natural Gas Production

The world produced 4,036 billion cubic meters of natural gas in 2021. The above graphic converts that into an equivalent of seven billion cubic meters of liquefied natural gas (LNG) to visualize it on the same scale as oil and gas.

Here are the top 10 producers of natural gas in 2021:

Rank Country2021 Natural Gas Production
(billion m3)
% of Total
#1🇺🇸 U.S. 934.223%
#2🇷🇺 Russia 701.717%
#3🇮🇷 Iran 256.76%
#4🇨🇳 China 209.25%
#5🇶🇦 Qatar 177.04%
#6🇨🇦 Canada 172.34%
#7🇦🇺 Australia 147.24%
#8🇸🇦 Saudi Arabia 117.33%
#9🇳🇴 Norway 114.33%
#10🇩🇿 Algeria 100.82%
🌍 Other 1106.327%
Total4,036.9100%

The U.S. was the largest producer, with Texas and Pennsylvania accounting for 47% of its gas production. The U.S. electric power and industrial sectors account for around one-third of domestic natural gas consumption.

Russia, the next-largest producer, was the biggest exporter of gas in 2021. It exported an estimated 210 billion cubic meters of natural gas via pipelines to Europe and China. Around 80% of Russian natural gas comes from operations in the Arctic region.

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