1、04The energy transition:metals&minings golden nugget07Corporates face a serious growth dilemma 23 July 2024Allianz ResearchMetals and mining:Do AllianzTradewe live in a material world?12Mining:the race against the clock16How can governments and corporates boost production?2 Though demand for metals

2、is skyrocketing,uncertainty,price volatility and CAPEX needs make companies very cautious.According to the International Energy Associations(IEA)s stated policies scenario(STEPS),demand for metals could double(even triple if we take the Announced Pledges Scenario(APS),which take for granted the fact

3、 that governments will reach all announced goals).Copper(2x)and lithium(7x)will be the most in demand,which should lead to higher prices for the sector.But timing the increase in supply is key:In the last 18 months,lithium prices have slumped by-85%as supply has increased by+70%since 2021.Volatile c

4、ommodity prices and uncertainties around policy and regulations have made companies cautious about committing substantial investments to long-term,capital-intensive projects.Though capex has been growing,in 2023 it stood just 22%above 2015 levels.Instead,companies in the sector are increasing furthe

5、r the pay-outs to shareholders:In 2023,dividends and stock buybacks were almost four times higher than in 2015.This conservative capital allocation is echoed in the growing M&A activity to acquire well-established assets.Speculative behavior is on the rise and fuels bubbles which could be detrimenta

6、l to metals and mining firms as well as downstream sectors.Our analysis reveals that speculation has been rising on a certain number of metals.Since 2022,the speculative index for copper has been on average 30%higher than between 2006-2019.Speculation also remains elevated for cobalt while it has be