How does COVID-19 affect the metal market? A recent white paper by the consulting firm Roskill examines precisely this question, using a comparison with the financial crisis of 2008. The results offer hope: the slump in metal production was initially similar to that of the financial crisis, but was much faster. As a result, most stocks should still be in place and production could resume much faster than it did after the 2008 crisis. Tourism, gastronomy and the cultural sector are also particularly hard hit by sectors that are not large metal consumers. There is still a but: What happens to the aviation industry is far from certain at the moment. If aircraft orders were to be cancelled in large numbers in the wake of the crisis, this could have a significant impact on the demand for technology metals needed in aircraft construction – for example, Rhenium.
After all, recent statements by Federal Environment Minister Svenja Schulze on the stimulus spending offer hope for the sale of strategic metals: according to german newspaper Die Zeit, she is calling for a “clear compass” for economic aid. According to Schulze, the aid will serve “employment, innovation and climate protection” and will therefore primarily benefit clean mobility and new forms of energy. Technology metals and rare earths are of particular importance here, as they are used in many innovative technologies, from electric motors to solar systems to LED lamps. However, it is still unclear to what extent the Federal Government will comply with Schulze’s request.
TRADIUM has access to the original Roskill whitepaper. A freely accessible summary can be found on miningweekly.com