Speaking at the Bank of America Merrill Lynch Global Metals, Mining & Steel Conference in Barcelona overnight, Glasenberg said government policies and transformational shifts in technology had accelerated the economic breakeven point for electric vehicles and electric storage systems.
“The electric vehicle revolution is underway and its impact is likely to be faster than expected – potentially creating material new sources of demand for enabling underlying commodities,” Glasenberg said in his presentation.
As well as cobalt and lithium, he also cited copper, nickel and manganese as metals to benefit.
Glencore is already one of the world’s leading producers of cobalt, nickel and copper, with the recent jump in cobalt making it the company’s top four earner behind coal, copper and zinc.
Glasenberg noted that the commodities that would fuel maturing commodities were changing.
“The looming EV/ESS revolution looks set to unlock material new sources of demand for enabling underlying commodities,” he said.
Glencore said almost all automotive players were accelerating their investment in, and adoption of, EV technologies, as governments around the world set aggressive emissions targets.
Glasenberg said the impact of electrification per vehicle was around 160 kilograms of copper, covering the battery, charging point and car itself.
If major countries meet their targets of 13.4 million EVs by 2010 and 52 million by 2025, that would have a drastic impact on metals, he said.
The 2020 target equates to an additional 373,000 tonnes of annual copper demand and 40,000t of nickel demand.
By 2025, those numbers would grow to 1.65 million tonnes of copper and 210,000t of nickel.
A scenario in 2035 where around 95% of global cars were electric would require more than 20Mt of copper, 1.8Mt of nickel and 679,000t of cobalt.
Glasenberg said this would present a challenge for the copper market, which was fighting aging assets, declining grades and a lack of investment.
He said copper supply would peak next year and decline thereafter at a 3.5% compound annual growth rate with no investment, with the copper project pipeline below pre-supercycle levels.
More broadly, in the short-term, Glencore believes there is scope for “cautious optimism”.
“Despite market concerns around Chinese monetary tightening, a repeat of the extreme weakness seen in 2015 appears less likely given stronger external demand and higher private sector investment,” it said.
Glencore estimates demand to grow across most commodities this year, with a forecast 4% CAGR in aluminium and nickel demand.
