The energy transition is powering ahead and full focus is given to resources. One of the elements apart magnets is Lithium. Following the reopening of China, we reiterate our bullish view on EVs and the broader requirements to achieve carbon neutrality.
Here are some key take-aways:
- Commodity bull market: In light of stronger than expected PMI data in February, paired with increased ongoing geopolitical tensions, commodities seem to be set for a price appreciation in the coming months. Moreover, the recent government-led crackdown of Chinese lithium miners fuelled the uncertainty of lithium supply which is likely to drive prices up. As per Bloomberg, China produces 10% lithium globally.
- China re-opening: According to the BofA Fund Manager Survey, investors are as bullish on China’s economic growth as they haven’t been in the past 16 years. Goldman Sachs sees a potential 24% increase of the MSCI China Index until the end of 2023, with a heavy tilt towards the consumer economy.
- Proliferation of EVs: Global sales of EV amounted to 3.6 million in 2022 and is expected to increase exponentially in the years to come, according to Bloomberg: Sales will reach an expected 5 million vehicles in 2023 followed by 6.4 million in 2024.