Price plays catch up to critical mineral performance

Crunch time for critical minerals is nigh. But it’s like waiting for a volcano to blow. You know it’s going to happen, it’s just a matter of when. Fat Prophets Resource Analyst David Lennox was commenting on the market performance of critical minerals. Renewable energy generation is eating up tens of thousands of hectares with new wind and solar farms and electric vehicles are continually entering the mainstream but the price of one of the most pivotal critical minerals, copper, remains intransigent. 12 month copper prices to close of trade yesterday from Trading Economics It was a matter of time said Mr Lennox. “As we're seeing mainstream US auto companies moving down that line, we've seen a significant obviously jump in in the requirements or demand for lithium and other rare earths that go into manufacturing, especially batteries,” he said. “So what's happened is we've seen a speculative end of the market really step away from a lot of those green focused lithium and copper type commodities as the demand hasn't flowed through yet. “That sea change is primarily now locked and auto car companies are building as we speak, electric vehicle production lines, and we are seeing more and more of them starting to roll out of factories and that will at some point in time put further pressure on the demand for the likes of lithium and copper and nickel as the demand for batteries increase. “Yes, there are nickel mines, lithium mines, copper mines that are in the process of development, but some of those mines are still some way off before they hit supply and the crucial crunch time is drawing near in terms of excess demand compared to supply.” Gold not shining for junior 12 month gold prices to close of trade yesterday (Fri 16Jun) from Trading Economics On the precious metals end of the spectrum, junior miners were not enjoying the love that usually came with sustained higher prices said Mr Lennox. It may be an indication that shareholders were deconditioned to the hype said Mr Lennox. Gold prices had recently retreated from a high of USD2000/oz said Mr Lennox. Gold closed at USD1957.50 yesterday (15Jun23). “We haven't seen investors willing to look at explorers and in fact value their exploration potential or what they've got in the ground at the value of an extended gold price,” he said. “They've been more inclined to be very conservative and valued exploration potential in the ground at very low gold prices. “And really, we didn't see explorers moving when the goal price did escalate through USD2000 announced, and AUD3000 announced. “We think primarily it's because when one thinks about when the gold price first got to USD2000, there was significant cries of ‘it was going to go to USD3000, it was going to go to USD4,000’ basically during this rally. “We've seen nothing like those sorts of call outs. And we believe that's why explorers as such have been lamenting more than we've seen producers (lamenting) in terms of pricing.”

Price plays catch up to critical mineral performance

Industry Queensland

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