Metals sector to continue COVID-19 rebound into 2022: S&P report

Pent-up consumer spending, government stimulus efforts and the accelerating energy transition will continue to drive prices and demand for a range of metals in 2022, according to a recent report by S&P Global Market Intelligence.

The global metals sector will continue its rebound from the effects of the COVID-19 pandemic, with demand growth set to keep prices at elevated levels for the medium term, in the view of S&P’s Metals and Mining Research team.

“While prices may moderate through 2022 as pandemic supply issues ease, building demand — due to factors including the growth of the electric vehicle sector and the energy transition — should set the stage for historically above-average prices through to 2025,” said the report.

The paper predicts global copper demand from solar and wind energy generation will reach 852,000 tonnes by 2022, while the growing electric vehicle market will account for 1.1 million tonnes next year.

For most other metals, margins are also expected to remain healthy in 2022 following the high prices and relatively steady costs experienced by most producers in 2021. However, S&P sees rising input costs and moderating prices as representing downside risks for margin levels across several commodities.

In terms of exploration, the expected increase in demand and strong prices is expected to help drive budgets 15% higher in 2022, though they will remain below the US$20.5 billion record seen in 2012.