S&P Global Market Intelligence 2023 forecast sees energy transition at a fast pace, helping major metals markets weather economic headwinds as demand outstrips supply

New YorkAnd the 4 November 2022 /PRNewswire/ — Commodity prices for key metals will be affected by the storms that batter the global economy through most of 2023 but are well positioned to rally through long-term drag as the energy transition continues apace, according to a new S&P Global Market Intelligence report released today. newly published 2023 forecast for electricity, natural gas and water utilities It is part of S&P Global Market Intelligence’s 2023 Big Picture Forecast report series.

With the recently passed Inflation Reduction Act, renewable power generation capacity in the United States is set to increase by about 150 gigawatts in the coming years, and demand for electric vehicles is set to increase approximately 30% annually on a global basis through 2026, including Metals, including copper, lithium, cobalt, and nickel will remain in high demand. The 2023 outlook covers both the US utility and renewable energy sectors, as well as global metals markets.

“The Inflation Control Act provides a rosy view of renewable energy development in the United States, while the energy transition occurring in most parts of the world will see demand for key raw materials such as lithium, nickel and copper begin to outpace supply years ago,” he said. Richard Sansomdirector of research at S&P Global Commodity Insights.

The main findings of the report include:

  • The Inflation Reduction Act (IRA) is expected to add 150 gigawatts of additional renewable energy capacity in the United States in the coming years, providing support for wind, solar, and storage projects.
  • The IRA has come at a time when regulators are facing a difficult confluence of events, with utilities in the midst of a prolonged period of capital intensive spending on infrastructure, the ongoing effects of the COVID-19 pandemic, and more frequent and intense weather events, the war in Ukrainerising interest rates and inflation combined to drive historical levels of price-state activity.
  • Federal legislation designed to support decarbonization initiatives is expected to attract significant interest from utilities investors in the coming years, but regulatory support, in the form of adequate returns on equity and abundant cost-recovery opportunities, is necessary to ensure the continued flow of capital into the sector.
  • With global economic conditions taking center stage, prices for industrial goods for 2023 covered by S&P Global Market Intelligence’s commodity briefing service are set to fall on average from 2022, with annual declines ranging from 7% for copper to 33% for lithium.
  • The increasing energy transition and demand for electric vehicles for batteries and key materials means that consumption will outpace the mining industry’s ability to increase supply, leading to commodity shortages as early as 2024. Addressing environmental, social and governance concerns while allowing the development of new mines will be crucial to these Accommodation efforts among all stakeholders.
  • Rising mineral prices entering 2022 have contributed to a 16% rise in global exploration budgets for the year, but investors have since moved away from mining companies as mineral prices have fallen; If this trend continues, S&P Global Market Intelligence forecasts a 10%-20% decline in the global exploration budget for 2023.

To request a copy of 2023 Electricity, Natural Gas and Water Utilities Industry Outlookplease contact [email protected].

S&P Global Market Intelligence’s opinions, quotes, and credit and other analyzes are statements of opinion as of the date they were expressed and are not statements or recommendations to buy, hold or sell any securities or make any investment decisions, and do not address the suitability of any security.

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Amanda Oy
S&P Global Market Intelligence
+1 212-438-1904
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SOURCE S&P Global Market Intelligence

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