The Periodic Table of Commodity Returns (2012-2021)
The Periodic Table of Commodity Returns (2022 Edition)
For investors, 2021 was a year in which nearly every asset class finished in the green, with commodities providing some of the best returns.
The S&P Goldman Sachs Commodity Index (GSCI) was the third best-performing asset class in 2021, returning 37.1% and beating out real estate and all major equity indices.
This graphic from U.S. Global Investors tracks individual commodity returns over the past decade, ranking them based on their individual performance each year.
Commodity Prices Surge in 2021
After a strong performance from commodities (metals especially) in the year prior, 2021 was all about energy commodities.
The top three performers for 2021 were energy fuels, with coal providing the single best annual return of any commodity over the past 10 years at 160.6%. According to U.S. Global Investors, coal was also the least volatile commodity of 2021, meaning investors had a smooth ride as the fossil fuel surged in price.
Source: U.S. Global Investors
The only commodities in the red this year were precious metals, which failed to stay positive despite rising inflation across goods and asset prices. Gold and silver had returns of -3.6% and -11.7% respectively, with platinum returning -9.6% and palladium, the worst performing commodity of 2021, at -22.2%.
Aside from the precious metals, every other commodity managed double-digit positive returns, with four commodities (crude oil, coal, aluminum, and wheat) having their best single-year performances of the past decade.
Energy Commodities Outperform as the World Reopens
The partial resumption of travel and the reopening of businesses in 2021 were both powerful catalysts that fueled the price rise of energy commodities.
After crude oil’s dip into negative prices in April 2020, black gold had a strong comeback in 2021 as it returned 55.01% while being the most volatile commodity of the year.
Natural gas prices also rose significantly (46.91%), with the UK and Europe’s natural gas prices rising even more as supply constraints came up against the winter demand surge.
Despite being the second worst performer of 2020 with the clean energy transition on the horizon, coal was 2021’s best commodity.
High electricity demand saw coal return in style, especially in China which accounts for one-third of global coal consumption.
Base Metals Beat out Precious Metals
2021 was a tale of two metals, as precious metals and base metals had opposing returns.
Copper, nickel, zinc, aluminum, and lead, all essential for the clean energy transition, kept up last year’s positive returns as the EV batteries and renewable energy technologies caught investors’ attention.
Demand for these energy metals looks set to continue in 2022, with Tesla having already signed a $1.5 billion deal for 75,000 tonnes of nickel with Talon Metals.
On the other end of the spectrum, precious metals simply sunk like a rock last year.
Investors turned to equities, real estate, and even cryptocurrencies to preserve and grow their investments, rather than the traditionally favorable gold (-3.64%) and silver (-11.72%). Platinum and palladium also lagged behind other commodities, only returning -9.64% and -22.21% respectively.
Grains Bring Steady Gains
In a year of over and underperformers, grains kept up their steady track record and notched their fifth year in a row of positive returns.
Both corn and wheat provided double-digit returns, with corn reaching eight-year highs and wheat reaching prices not seen in over nine years. Overall, these two grains followed 2021’s trend of increasing food prices, as the UN Food and Agriculture Organization’s food price index reached a 10-year high, rising by 17.8% over the course of the year.
As inflation across commodities, assets, and consumer goods surged in 2021, investors will now be keeping a sharp eye for a pullback in 2022. We’ll have to wait and see whether or not the Fed’s plans to increase rates and taper asset purchases will manage to provide price stability in commodities.
4 Benefits of LFP Batteries for EVs
LFP batteries are gaining popularity in EVs, with brands like Tesla and Ford increasingly adopting this technology due to their benefits.
LFP Batteries for Electric Vehicles
Even though the technology behind EVs has evolved significantly over the past decade, batteries have always been a critical component.
Lithium iron phosphate (LFP) batteries are becoming an increasingly popular choice for standard-range EVs, with major automotive producers like Tesla and Ford introducing LFP-powered vehicles into their catalog.
In this infographic, our sponsor First Phosphate highlights the advantages of using LFP cathode batteries in EVs.
Benefit 1: Safety
LFP batteries are among the safest types of lithium-ion batteries, with a low risk of overheating and catching fire.
These batteries are less prone to thermal runaway and do not release oxygen if they catch fire, making them safer than other lithium-ion batteries.
Benefit 2: Long Life Cycle
LFP batteries have a longer lifespan than other types of lithium-ion batteries due to their low degradation rate. Meaning they can be charged quickly without significant battery damage, therefore leading to a longer lifespan.
LFP batteries can also withstand a larger number of charge and discharge cycles, meaning they can last longer before needing to be replaced.
Benefit 3: Cost-Effective
The materials used to produce LFP batteries are also relatively cheap compared to other types of lithium-ion batteries.
The main cathode materials used in LFP batteries are iron and phosphate, and they are in relative abundance in contrast to other battery metals. This makes them a cost-effective option for a variety of energy storage applications.
Benefit 4: Environmentally Sustainable
LFP batteries are environmentally sustainable because they are non-toxic and do not contain harmful heavy metals such as cobalt or nickel.
The materials used in these batteries are easier to source ethically, which makes them a more sustainable option than other types of lithium-ion batteries.
What’s Inside the Battery?
Most EVs utilize battery packs consisting of multiple individual battery cells. Similar to other types of lithium-ion batteries, LFP battery cells are made up of several components.
The cathode is the battery’s positive electrode and impacts its performance. It determines aspects such as energy capacity, charging and discharging speed, and the risk of combustion.
In LFP batteries, the cathode composition consists of three elements.
Today, these batteries are becoming increasingly popular in standard-range EV models. LFP market share has significantly increased, reaching its highest share in the past decade at 30% of the market in 2022, according to the International Energy Agency (IEA).
First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for the production of cathode active material for the LFP battery industry.
Click here to download First Phosphate’s Investor Deck now.
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