Weekly Buzz: The modern metal rush investors are eyeing up 💎

5 minute read

Critical metals powering our modern world – what the industry calls "future minerals" – are facing a huge supply-demand imbalance. Some analysts see this as a buying opportunity, while JPMorgan calls this the most significant commodity supercycle in decades.

What’s going on?

The International Energy Agency estimates we’ll face a copper shortage of 6 million tons by 2030 – that’s about 27% of what the world produces in an entire year. With lithium, it's predicted we'll need 20 times more by 2040 to meet clean energy goals than we did five years ago.

The supply constraints aren't just about volume – they're about geography and complexity. For example, most lithium extraction happens in just three countries: Australia, Chile, and China. Making matters worse, developing new mining operations takes years of development and tons of capital.

Meanwhile, the applications keep expanding: as an example, a single EV contains about four times more copper than a conventional car. In China, electric vehicles captured nearly 50% of car sales in 2024, up from just 2% in 2020. Governments worldwide have rolled out over 100 new policies linked to future minerals in the past three years alone.

What's the takeaway?

Your first instinct might be to buy these commodities directly. But the companies behind these future minerals are probably a savvier way to handle volatile commodity prices.

Today's equivalent of the California Gold Rush includes the upstream mining firms extracting these critical materials, sure, but also the downstream manufacturers building batteries, the companies developing charging networks, and so on. For investors, this means multiple entry points along the value chain.

(With our Flexible Portfolios, you can access targeted ETFs that track mining companies, cleantech firms developing renewable infrastructure, or create a diversified mix across the whole value chain.)

This article was written in collaboration with Finimize.

📰 In Other News: Can the euro challenge the dollar?

The euro could become a genuine alternative to the US dollar – but only if Europe gets its act together. That's the message from European Central Bank (ECB) President Christine Lagarde, who outlined an ambitious vision for the euro's global role.

Her timing isn't coincidental: global investors have been spooked by recent US economic policy. Yet most are fleeing to gold rather than the euro.

The numbers tell the story: the dollar commands about 60% of international reserves, while the euro holds just 20%, according to IMF data. For the euro to gain ground, Lagarde argues Europe needs deeper and more unified markets, alongside a defence framework to back up economic partnerships.

What's clear is that major currency shifts unfold over decades, not years. While we could see the early stages of change, the dollar's dominance isn't likely to disappear anytime soon.

(For more on the challenges and opportunities we see across Europe, check out our latest CIO Insights: Will Europe’s fiscal spark ignite real growth?)

📖 A Little Context: Commodity supercycles

Commodity supercycles are extended periods where raw material prices rise well above long-term trends, driven by structural changes. One example is the China supercycle in the early 2000s, when the country’s rapid industrialisation created enormous demand for metals like iron and copper. Some analysts suggest we might be at the beginning of a new supercycle, driven by the global transition to clean energy.

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