Industrial Metal ETFs Win in 2021: What Next in 2022?

Industrial metals had a sizzling 2021. Vaccines, therapies and President Biden’s $1.2-trillion infrastructure bill instilled considerable optimism in the markets as it calls for faster return to normalcy. This, in turn, boosted global economic recovery and industrial activities. No wonder, industrial metals have been soaring (read: 4 Sector ETFs to Make the Most of Infrastructure Bill).

Copper prices hit a 10-year high. The brighter prospects of the EV industry are also keeping the demand outlook decent for industrial metals like nickel and lithium. Nickel prices were near the strongest levels since 2014 while aluminum is at its highest since 2018. Tin is at its strongest since 2012.

Some specific metals have soared massively in 2021. Let’s see if these metals hold the potential to surge in 2022 too.

Metals in Focus

Copper – iPath Series B Bloomberg Copper Subindex Total Return ETN JJC –Up 21.1% YTD: Setback Likely in 2022

Copper imports from China (a key copper-consuming nation) in November were up for the third month in a row, hitting the highest since March. While such high demand points to the fact that copper price may remain strong ahead, higher supplies may act as a headwind to the price scenario. The global refined copper market is expected to be in substantial surplus in 2022, according to the International Copper Study Group (ICSG), per a mining.com article. ICSG expects 2022 supply to exceed demand by 328,000 tons.

Lithium – Global X Lithium & Battery Tech ETF LIT –Up 42.4% YTD: Rise Likely in 2022

Lithium prices are rising at their fastest pace in years, due to higher demand from industries such as electric vehicles and smartphones. The high cost of converting the metal into industrial use has boosted prices by 240% in 2021, according to research firm and price provider Benchmark Mineral Intelligence, quoted on street.com.

Further rise is likely as supplies for industrial use are incapable of meeting higher EV demand. The lithium-ion batteries are used for electric vehicles and energy-storage systems and the demand is high as the world transitions away from fossil fuels.

Simon Moores, CEO of Benchmark Mineral Intelligence, told Emerging Tech Brew that the EV industry is already facing a shortage of battery-grade lithium, and that price volatility will be a “three-year thing,” as quoted on a morningbrew article.

Nickel – iPath Series B Bloomberg Nickel Subindex Total Return ETN JJN – Up 17.7% YTD: Rise Likely in 2022

Nickel is deployed in the electric vehicle batteries, battery storage, geothermal energy, and hydrogen industries. The demand picture for nickel is likely to strengthen in 2022 as these industries are red-hot in demand.

Aluminum – iPath Series B Bloomberg Nickel Subindex Total Return ETN JJU – Up 17.7% YTD: Rise Likely in 2022

Aluminum prices have continuously risen this year. China's output has fallen due to restrictions on energy usage and halted production at a 300K-ton capacity factory in the Yunnan province. Thanks to increasing demand against expected supply crunch, the average yearly price in 2022 is projected to rise 6% year over year. Despite rising prices, the U nited States, the world´s largest aluminum importer, has increased its purchases this year by 4.5% year over year.

Tin – iPath Series B Bloomberg Tin Subindex Total Return ETN JJT – Up 120.2% YTD: Rise Likely in 2022

After having surged to record highs, tin prices are expected to remain strong in the coming days too as Indonesia plans to stop the soldering metal’s exports from 2024 to attract investments in downstream industries. This metal is also a beneficiary of the rise in clean energy.

 

 

 

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Global X Lithium & Battery Tech ETF (LIT): ETF Research Reports
 
iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN): ETF Research Reports
 
iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT): ETF Research Reports
 
iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC): ETF Research Reports
 
iPath Series B Bloomberg Aluminum Subindex Total Return ETN (JJU): ETF Research Reports
 
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