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Prediction Consensus: What The Experts See Coming In 2022

Prediction Consensus: What The Experts See Coming In 2022

Even at the best of times, it’s human nature to want to decode the future.

During times of uncertainty though, we’re even more eager to predict what’s to come. To satisfy this…

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Prediction Consensus: What The Experts See Coming In 2022

Even at the best of times, it’s human nature to want to decode the future.

During times of uncertainty though, we’re even more eager to predict what’s to come. To satisfy this demand, thousands of prognosticators share their views publicly as one year closes and another begins. In hindsight, we see varying levels of success at predicting the future.

In truth, as Visual Capitalist's Nick Routley details below, experts are merely guessing at what will happen over the coming year. In 2020, almost nobody had a pandemic on their bingo card. In 2021, NFTs completely flew under the radar of experts, and nobody saw a container ship get lodged in the Suez Canal in their crystal ball.

So, why should we pay any attention to predictions at all? Are they, as Barry Ritholtz says, “wrong, random, or worse”?

For one, these guesses are backed by expertise and experience, so the accompanying analysis is informative. Perhaps more importantly though, influential people and companies are in a position to shape the future with their predictions. In some cases, sentiment and actions can turn a prediction into a self-fulfilling prophecy.

Regardless, whether for research or pure entertainment purposes, we’ve sifted through hundreds of reports, interviews, and articles to see which predictions are generally the most agreed upon. Where do experts see the ball moving over the next year? Our bingo card sums up the top 25, and below, we’ll dig into some of the trends that could shape 2022.

Want to dive deeper into this year’s predictions? Join us for our interactive webinar on Jan 13th, 2022 by becoming a VC+ member: Join VC+ Today

Vibe Check: What’s the General Outlook for 2022?

Based on the hundreds of predictions we analyzed, the general mood can be described as cautiously optimistic.

For starters, the global economy will likely keep growing, but not at the rate it did in 2021. We aggregated 40+ predictions from reputable sources such as the IMF and Goldman Sachs to determine median GDP estimates for the world, and select regions:

 

Next, there’s broad agreement that monetary policy will begin to tighten over the next 12 months. Here’s what major central banks are predicted to do:

 

Multiple experts described an era of lower equity returns and increased volatility. Many of the issues that plagued 2021 have carried over into 2022.

Technological disruption continues to reshape industries, and climate change and cybersecurity issues will be top of mind this year. Geopolitical tensions are heating up as well, now that countries have acclimated to the immediate challenges posed by the pandemic.

In short, nobody expects 2022 to be uneventful.

Trends that Will Shape 2022

Some of the predictions above are straightforward. GDP targets and explicit binary statements don’t require too much explanation.

Below are some of the predictions experts agreed on that are worth digging into in more detail:

1. Geopolitical Tensions Will Flare Up

There are a number of potential hotspots around the world, but here are a few that experts are watching in 2022.

Iran: Tensions ratcheted up between the U.S. and Iran after an attack on a U.S. military base in southern Syria in the fall of 2021. Further, the tension between Iran and Israel has the potential to escalate further in 2022, drawing in other nations in the region into a conflict.

Ukraine: This is a continuation of tensions that flared up after Russian annexation of Crimea in 2014. Europe’s dependence on Russian gas and Ukraine’s position as a key gas transit hub makes this a situation experts are watching very closely.

Taiwan: The risk that China will make a move on Taiwan has elevated in the minds of experts, though actions may contain “more bark than bite”.

2. China’s Rocky Start to 2022

At the dawn of 2021, many of the predictions around China were largely optimistic as the country had entered a recovery phase sooner than the rest of the world.

Fast forward to 2022, and the predictions are the polar opposite as China faces challenges on a number of fronts. To begin with, there is pessimism around China’s zero-COVID strategy, which even today sees entire cities fall under strict lockdown orders. This strategy has unavoidable economic impacts.

Secondly, uncertainty around power shortages, a potential housing crisis, and regulatory crackdowns have dampened enthusiasm for the country’s near-term prospects.

Finally, Xi Jinping eliminated term limits on the presidency in 2018, potentially positioning himself to lead China indefinitely. As the Chinese Communist Party’s 20th National Party Congress approaches later in the year, if the country is still on uncertain footing, it could create a tense political atmosphere in Beijing.

3. The Year of the Worker

Labor dynamics have stayed in the spotlight since the pandemic upended the world of work. There are a number of trends that emerge from this broader theme:

  • The labor shortages that emerged during the pandemic will remain in place in 2022 and beyond. Certain sectors, such as cybersecurity, are facing acute shortages of skilled workers

  • There is a broad consensus that the future of office work is “hybrid”. Companies that don’t offer flexibility will face a disadvantage in attracting talent

  • The internet and social media have opened up a number of career pathways for individuals to earn an income beyond simply working for a company

  • Work/life balance and burnout will be central points in discussions around workplace culture

4. The Changing Digital Ecosystem

If predictions are any indication, we’ll be hearing a lot more about NFTs and Web3. There are plenty of opinions on the former, and they run the spectrum from exuberant to outright bearish. Whether the hype surrounding profile picture NFTs dies down is anyone’s guess, but the technology has opened the door to a lot of experimentation for artists and creators.

On that note, experts are generally excited about the prospects of the burgeoning “Creator Economy”—a catch-all term describing the new technological ecosystem and growing infrastructure that is allowing individual content creators to monetize and flourish.

Another trend that is picking up steam is ecommerce centered around social media. The ability to purchase products straight from influencers is becoming more common on major social platforms, and ecommerce companies are creating more products to support influencers in their marketing endeavors.

By 2026, Gartner estimates that 60% of Millennial and Gen Z consumers will prefer making purchases on social platforms over traditional digital commerce platforms.

5. Inflation Slowly Eases Off

Worries about inflation have always cropped up here and there, but in countries like the U.S., truly damaging amounts of inflation haven’t been seen since the 1980s.

Last year, the narrative changed.

After trillions of dollars of pandemic stimulus and borrowing, inflation suddenly came back on the radar—and it was not “transitory” as early central bank statements hoped. Now, going into 2022, experts expect higher-than-normal inflation levels to continue.

While inflation is expected to have an impact going forward, experts also see it leveling off (relative to 2021) as supply chain disruptions work themselves out.

6. Another Banner Year of Electric Vehicles

As climate change dominates more of the spotlight in 2022, regulatory actions will force automakers to consider the future of their fossil-fuel models.

Even as incentives are slowly rolled back in a number of markets, EV sales are expected to set new records this year. As well, electrification of fleets will be a trend that gathers momentum.

Industrial and battery metals like lithium and cobalt surged by 477% and 208%, respectively, in 2021, a trend that many experts believe will stretch into 2022.

The Good Stuff

Of the hundreds of sources we looked at, here were a few that stood out as memorable and comprehensive:

  • Bloomberg’s Outlook 2022: This article compiled over 500 predictions from Wall Street banks and investment firms.

  • The All-In Podcast’s 2022 predictions: This lively podcast, featuring Chamath Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg, is always entertaining and informative. In this predictions episode, biggest business winners and losers is great, as is best performing asset.

  • Eurasia Group’s Top Risks for 2022: This comprehensive group of articles covers a lot of ground, and offers up some very credible predictions as to what might happen on the world stage this year.

  • Wood Mackenzie’s Predictions for 2022: Wood Mackenzie analysts offer 10 predictions for key developments expected in the energy and natural resources industries in 2022.

Lastly, if you’ve found our Prediction Consensus useful, we’re going to be diving even deeper into this subject matter in the coming weeks.

Our VC+ members get access to the whole Global Forecast 2022 series, which features a webinar and additional articles that flesh out predictions for the coming year in even more detail. You can learn more about it here.

Tyler Durden Fri, 01/07/2022 - 22:20

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Spread & Containment

Zinc Outlook 2022: Analysts Expect Small Refined Deficit

Click here to read the previous zinc outlook. After an uncertain 2020, zinc rose steadily in 2021, hitting a 14 year high in the second half of the year.The power crisis and increasing demand for the base metal as strict COVID-19-related lockdown restrict

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Click here to read the previous zinc outlook.

After an uncertain 2020, zinc rose steadily in 2021, hitting a 14 year high in the second half of the year.

The power crisis and increasing demand for the base metal as strict COVID-19-related lockdown restrictions were lifted supported prices for zinc during the 12 month period.

As the new year begins, the Investing News Network (INN) caught up with analysts to find out what’s ahead for zinc supply, demand and prices. Read on to learn what they had to say.


Zinc outlook 2022: 2021 in review


Zinc prices kicked off 2021 above the US$2,800 per tonne mark after rallying for most of the second half of 2020. A recovery in the steel sector helped the base metal throughout the first half of 2021 as COVID-19 lockdown measures eased, supporting demand for zinc.

Commenting on the main trends seen in the market in 2021, Helen O’Cleary of CRU Group told INN zinc’s demand recovery was stronger than expected in the US and Europe, but lagged in Asia excluding China.

In October, zinc prices hit their highest level in 14 years, hovering around the US$3,800 mark on the back of the power crisis and costs associated with carbon emissions.

“Zinc’s price outperformed expectations in 2021 on the back of strong demand and smelter disruption, particularly in Q4, when European smelters started to cut back due to record high energy prices,” O’Cleary said.

One of the world’s top zinc smelters, Nyrstar (EBR:NYR), said back in October that it was planning to cut production at its European smelter operations. Mining giant Glencore (LSE:GLEN,OTC Pink:GLCNF) also said it was adjusting production to reduce exposure to peak power pricing periods during the day.

Speaking with INN, Carlos Sanchez of CPM Group said zinc has been in recovery since prices bottomed out in 2020, helped in part by vaccination efforts globally and also by supply disruptions around the world.

“The most recent issue is the concern about high energy input costs into smelters in Europe — that's been pushing prices higher recently,” he said. Even though prices could not sustain that level until the end of the year, zinc remained above US$3,500 on the last trading day of 2021.

Zinc outlook 2022: Supply and demand


As mentioned, demand for base metals took an upward turn in 2021 as the world economy recovered on the back of stimulus plans and as vaccination rollouts took place in many parts of the world.

Looking at what’s ahead for zinc demand in 2022, CRU is expecting Chinese demand growth to slow to 1.1 percent year-on-year as the effects of stimulus wane.

“In the world ex-China we expect demand to grow by 2.4 percent, with the ongoing auto sector recovery partially offsetting the construction sector slowdown in Europe and the US,” O’Cleary said.

CPM is also expecting zinc demand to remain healthy in 2022, both inside and outside of China, including demand from developing countries. “One thing that remains uncertain is what will happen with COVID,” Sanchez said.

Moving onto the supply side of the picture, the analyst expects that if everything remains status quo, disruptions are unlikely to happen.

“There are going to be some blips here and there, but there have been some labor issues in Peru; yes, there's been some energy problems in Europe and China, but that's a fact in zinc output and in demand to an extent,” Sanchez said. “But really the catalyst that we don't know, and how it can affect prices, is how COVID will impact industries.”

For her part, O’Cleary is expecting most disruptions to happen in the first quarter, with CRU currently having a disruption allowance of 55,000 tonnes for that period.

“But this may well tip over into Q2,” she said. CRU is expecting mine supply to grow by 5.1 percent year-on-year in 2022, and for the concentrates market to register a 190,000 tonne surplus.

Meanwhile, smelter output is forecast to grow by less than 1 percent year-on-year in 2022, according to the firm, which is currently forecasting a small refined zinc deficit in 2022.

“Should smelter disruption exceed our 55,000 tonne allowance the deficit could grow,” O’Cleary said. “But high prices and a tight Chinese market could lead to further releases of refined zinc from the State Reserve Bureau stockpile, which could push the market towards balance or even a small surplus.”

Similarly, CPM is expecting the market to shift into a deficit in 2022. “That's due to the strong demand, recovering economies of COVID and its financial economic effects,” Sanchez said.

Zinc outlook 2022: What’s ahead


Commenting on how zinc might perform next year, O’Cleary said prices are likely to remain high in Q1 due to the threat of further energy-related cutbacks in Europe during the winter heating season.

O’Cleary suggested investors keep an eye on high prices and inflation, as they could hamper zinc demand growth.

Similarly, CPM expects prices to stay above current levels and to average around US$3,400 for the year. “I wouldn't be surprised to see zinc top US$4,000,” Sanchez said. “But at the same time, I don't think it holds above there; you'd have to have really strong fundamentals for that to happen, stronger than what's happening now.”

The CPM director suggested zinc investors should keep an eye on COVID-19 developments and be quick movers, taking a position whether it's short or long.

Looking ahead, FocusEconomics analysts see prices for zinc cooling markedly next year before falling further in 2023, as output gradually improves and new mines come online.

“Moreover, fading logistical disruptions and easing energy prices will exert additional downward pressure, although solid demand for steel will continue to support prices,” they said in their December report, adding that pandemic-related uncertainty is clouding the zinc outlook.

Panelists recently polled by the firm see prices averaging US$2,827 in Q4 2022, and US$2,651 in Q4 2023.

Don’t forget to follow us @INN_Resource for real-time news updates.

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Dr. Peter McCullough: Official COVID “Narrative Has Crumbled”

Dr. Peter McCullough: Official COVID "Narrative Has Crumbled"

Authored by Art Moore via WND.com,

Dr. Peter McCullough – a renowned cardiologist and highly published medical scientist whose confrontation of the government’s COVID-19 policies.

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Dr. Peter McCullough: Official COVID "Narrative Has Crumbled"

Authored by Art Moore via WND.com,

Dr. Peter McCullough – a renowned cardiologist and highly published medical scientist whose confrontation of the government's COVID-19 policies has drawn more than 40 million views on Joe Rogan's podcast – told WND in a video interview Thursday night the official pandemic narrative that has been fiercely guarded by establishment media and social-media censors is "completely crumbling."

That narrative, he said, included "false statements regarding asymptomatic spread, reliance on lockdown and masks – which obviously didn't work – the suppression of early treatment, the mass promotion of vaccines that failed."

"And now here we are, almost in complete free fall," McCullough said, referring to the record number of COVID-19 cases as officials acknowledge the vaccines don't prevent infection or transmission.

McCullough noted that in California, with the more contagious but much milder omicron variant now dominant, health care workers who tested positive for COVID-19 and had symptoms were told to go back to work.

"With that, I think that's it. I think that's the end. The narrative has crumbled. People don't want these vaccines," McCullough said.

"The vaccines should be pulled off the market. They clearly are not solving the problem."

The focus, he said, should be on "treating high-risk patients who develop symptoms" with some of the early treatments that he and other physicians around the world have found to be effective, including ivermectin and a new drug granted emergency use authorization by the FDA, Paxlovid.

McCullough cited a study from Denmark and data from the U.K.'s health agency showing that the vaccines have zero effectiveness against omicron.

Completing this poll entitles you to WND news updates free of charge. You may opt out at anytime. You also agree to our Privacy Policy and Terms of Use.

"That's not misinformation," he said. "I'm just quoting the data. All of this can be looked up. Fact-checkers can look at it. I know I'll never have any problems with allegations of misinformation, because I just quote the data."

President Biden clearly had McCullough in mind when on Thursday he urged social media companies and media outlets to "please deal with the misinformation and disinformation that's on your shows. It has to stop."

McCullough pointed out his work has been relied upon by courts across the nation, including the U.S. Supreme Court, and he has testified to the U.S. Senate and will be back there later this month.

"I think America knows who is giving them the straight story."

In the half-hour video interview with WND (embedded below), McCullough also discussed:

  • The punishment of physicians who counter the official COVID narrative and use clinically indicated, FDA-approved drugs off-label such as ivermectin to treat COVID-19 patients, including a colleague in Maine whose was ordered to undergo a psychological examination after her license was suspended;

  • His participation in a rally in Washington, D.C., on Jan. 23 protesting vaccine mandates;

  • The Supreme Court's rulings Thursday on vaccine mandates;

  • The possibility that omicron could spell the end of the pandemic, serving as a "universal booster";

  • Data showing that vaccination has backfired, making the pandemic worse in nations with high vaccine intake;

  • The lethality of the mRNA vaccines;

  • His view on Biden's mass testing program;

  • His take on new FDA-approved treatments and his simple, inexpensive, over-the-counter protocol for treating omicron;

  • The unwillingness of so many doctors to "come off the sidelines" and treat patients for COVID-19;

  • The "crisis of competence" among top government health officials;

  • Where to find resources and support for physicians and patients, and for employees confronting mandates.

"I think Americans are going to understand that their individual choice is really what's going to matter in the end," he McCullough told WND in conclusion. "If Americans decide that they're not going to take any boosters or any more vaccines, it doesn't matter how many mandates or how many court decisions that happen. The vaccine program is going to crumble. I think it's just a matter of saying no."

He emphasized that the vaccines are still "research."

"No one can be forced into it," he said of vaccination. "And they're not turning out to be safe or effective. So, if  everybody just stands firm and declines the vaccines, I think that will be the quickest way for us to get out of this."

See the WND interview with Dr. Peter McCullough:

McCullough, in a video interview with WND in December, called for a "pivot" from the current policies to early treatment and "compassionate care" for those who have COVID or have suffered vaccine injuries, which have included myocarditis, neurological issues and blood clotting.

"Now is the time for doctors to step up. Now is not a time for rhetoric or harsh statements regarding scientific discourse," he said.

Many of McCullough's 600 peer-reviewed publications have appeared in top-tier journals such as the New England Journal of Medicine, Journal of the American Medical Association and The Lancet. He testified to the U.S. Senate in November 2020 against what he described as the federal government's politicization of health care during the pandemic, curbing or blocking the availability of cheap, effective treatments. In a speech in September, he told of having been stripped of the editorship of a Swiss-based journal after having lost his position with a major health system, "with no explanation and no due process." Baylor University Medical Center fired him in February. And Texas A&M College of Medicine, Texas Christian University and University of North Texas Health Science Center School of Medicine have cut ties with McCullough, accusing him of spreading misinformation.

"I've been stripped of every title that I've ever had in that institution. I've received a threat letter from the American College of Physicians, [and] a threat letter from the American Board," he said in September.

All because of his "lawful" participation "in a topic of public importance."

He said there are "powerful forces at work, far more powerful than we can possibly think of, that are influencing anybody who is in a position of authority."

McCullough is the chief medical adviser for the Truth for Health Foundation, a physician-founded charity that says it is "dedicated to following the Oath of Hippocrates to serve individual patients to the best of our ability and judgement and to uphold the highest standards of medical ethics."

*  *  *

Last year, America's doctors, nurses and paramedics were celebrated as frontline heroes battling a fearsome new pandemic. Today, under Joe Biden, tens of thousands of these same heroes are denounced as rebels, conspiracy theorists, extremists and potential terrorists. Along with massive numbers of police, firemen, Border Patrol agents, Navy SEALs, pilots, air-traffic controllers, and countless other truly essential Americans, they're all considered so dangerous as to merit termination, their professional and personal lives turned upside down due to their decision not to be injected with the experimental COVID vaccines. Biden’s tyrannical mandate threatens to cripple American society – from law enforcement to airlines to commercial supply chains to hospitals. It's already happening. But the good news is that huge numbers of "yesterday’s heroes" are now fighting back – bravely and boldly. The whole epic showdown is laid out as never before in the sensational October issue of WND's monthly Whistleblower magazine, titled "THE GREAT AMERICAN REBELLION: 'We will not comply!' COVID-19 power grab ignites bold new era of national defiance."

SUPPORT TRUTHFUL JOURNALISM. MAKE A DONATION TO THE NONPROFIT WND NEWS CENTER. THANK YOU!

Tyler Durden Mon, 01/17/2022 - 23:50

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Graphite Outlook 2022: Demand from Battery Segment to Remain High

Click here to read the previous graphite outlook. Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge. Despite discussions about battery chemistry

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Click here to read the previous graphite outlook.

Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge.

Despite discussions about battery chemistry changes, many experts think graphite will remain a dominant element in EV batteries for at least the next decade. Both synthetic graphite and natural graphite, in the form of the intermediate product spherical graphite, are used in the anodes of lithium-ion batteries.

Here the Investing News Network (INN) looks at the key trends in the graphite market in 2021 and what the graphite outlook is for 2022.


Graphite trends 2021: Shipping and power cost challenges


After a tumultuous 2020 in which supply chains were put to the test as economies shut down due to the coronavirus pandemic, graphite kicked off 2021 on a bright note.

In early 2021, prices for natural flake graphite were slightly higher than expected as a result of unexpectedly strict environmental investigations and closures in China, Suzanne Shaw of Wood Mackenzie told INN back in July.

“There was also considerable shipping disruption early on in the year with containers and vessels not where they should be as routes reopened post-COVID,” she said. “Limited availability was prioritized for higher-value cargos, with lower-value raw materials flows disrupted. This situation subsided through Q2.”

Pricing was relatively flat during the first six months of 2021, according to Benchmark Mineral Intelligence data.

“Prices for +100 mesh flake concentrate, across all purities, have moved upward by around 5 to 10 percent year-to-date, while pricing for all other grades has moved less than 5 percent so far this year due to continued structural oversupply in the graphite market,” Miller told INN at the end of H1. “Moreover, the global shipping situation at the moment is hindering upward price pressure.”

Prices took a turn in August, jumping on the back of the energy crisis, which hit producers and disrupted output. Battery grades were particularly hit by rising power costs as both the manufacture of synthetic graphite and the processing of spherical graphite from natural flake are known for their high levels of energy consumption.

In terms of supply, Chinese production was expected to ramp up to meet rising domestic battery demand, as there is still a lot of overcapacity in China.

“However, the overall trend is that China is showing less appetite on the raw material side and investing in higher-value downstream industries rather than exploration/mining across most mineral sectors,” Shaw said at the end of H1. “It will continue to increase its own imports of flake graphite.”

Meanwhile, on the synthetic graphite front, the market could be driven into a deficit as a result of increasing demand from the lithium-ion battery and downstream EV sectors worldwide, Roskill, which was acquired by Wood Mackenzie, reported back in August.

“From a performance perspective, EV automakers prefer synthetic graphite, citing its superior fast charge turnaround and battery longevity,” a November Fastmarkets report reads. “Synthetic graphite, however, is costly, power intensive and environmentally unfriendly, with supply centered in China at odds with North American and European automakers’ desire for more localized supply.”

Graphite outlook 2022: What’s ahead


At the end of last year, analysts were expecting demand from the battery segment to continue to grow on the back of increased EV sales, with growth opportunities for both synthetic and natural graphite.

According to Benchmark Mineral Intelligence data, demand for natural graphite from the battery segment amounted to 400,000 tonnes in 2021, with that number expected to scale up to 3 million tonnes by 2030. Meanwhile, demand for synthetic graphite reached about 300,000 tonnes in 2021 and it’s expected to increase to 1.5 million tonnes by 2030.

“We do expect recycling to plug some of these gaps, but this isn't really likely to reach the necessary scale until post 2030,” Miller said in a December webinar. “So at the moment, the focus is really on synthesizing and mining this material as quickly as possible to meet the demand that we might see into the future.”

By volume, graphite is one of the most important elements in any electric vehicle battery ― there is between 50 and 100 kilograms of graphite, whether synthetic or natural, present within each vehicle.

“We can really see the sector growing progressively to around 15 times the demand we see today by 2030, outpacing moderate growth and demand from industrial applications,” Miller said.

That said, it's important to note that only certain types of natural graphite supply are relevant to and able to be qualified for the lithium-ion supply chain.

“This is really the biggest challenge in using natural graphite as a battery input,” Miller said. “This has the potential to exclude further capacity from projects in development.”

The expert explained that if all planned supply reached the market, it would have the potential to balance out demand up to 2029 to 2030, but with these limitations on which material can be qualified, the story takes a different direction.

“The primary limitation here is the mesh size inputs for the battery supply chain must be fine to medium flake,” Miller said, adding that consistency and high purity, somewhere around 94 to 95 percent carbon, is also key. “Flake graphite for the lithium ion supply chain must have low levels of impurity in order to avoid compromising the quality and longevity of the end product.”

According to Benchmark Mineral Intelligence, today, synthetic graphite anodes make up the majority of market share and approximately 57 percent of the anode market.

“Going forward, we do expect this to shift in the direction of natural graphite anodes to around a 50-50 balance for a multitude of reasons,” Miller said. His reasons include tight graphitization capacity, higher costs for synthetic graphite anode material and also the environmental shortcomings of the synthetic graphite supply chain at the moment.

Graphitization is the process of producing synthetic graphite from carbon-rich, oil-derived feedstock raw materials, and this process is energy intensive.

“In China, graphitization capacity has been mainly located in Inner Mongolia, a province which has some of the lowest energy costs in the country and where other high-energy metal producers, such as ferro-chrome smelters, are based,” Fastmarket reports. “But Inner Mongolia was the first in the firing line when the 2021 energy crisis unfolded.”

This resulted in reduced production and unpredictable cost increases for synthetic graphite, and the reason why many battery manufacturers in China could turn to natural graphite instead.

Looking ahead at how overall demand for graphite will perform, Benchmark Mineral Intelligence expects the battery segment to challenge industrial applications as the leading end-market for graphite demand. Over the next decade, anode demand will grow at an average of 27 percent compound annual growth rate (CAGR).

“Unlike some of the other critical mineral markets, there is still time for both the natural and synthetic graphite market deficits to be redressed — so long as adequate funding is provided for junior miners in the near term,” Miller said.

Commenting on price performance, Fastmarkets maintains the view that both flake and spherical graphite prices will trend stable to higher in the near term.

“The only potential reprieve we see for graphite prices would be if the power constraints diminish EV lithium-ion battery production, and in turn reduce demand for graphite anodes sufficiently to stem the upward pressure on graphite prices,” analysts said.

Another key trend for graphite investors to watch in the new year is how western automakers keep up with China, which has become the dominant player in all steps of the anode supply chain.

Interestingly, before 2021 came to an end, US-based Tesla (NASDAQ:TSLA) made a move to secure graphite supply from top graphite producer Syrah Resources (ASX:SYR).

The ASX-listed company will process graphite from its Balama mine in Mozambique in its Louisiana plant, and will supply the EV maker with anode graphite material for an initial four year period. Tesla also has an option to offtake additional volume subject to Syrah expanding its capacity beyond 10,000 tonnes per year.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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