For the green transition of the global economy that many governments are striving for, there is one crucial factor – a sufficient supply at reasonable prices of the raw materials required for sustainable technologies such as electromobility. Prices must not go through the roof, as this would jeopardise the financial viability of the green transition, which is already in doubt. On the other hand, prices must not be so low that no new projects are launched to extract them.

Demand for raw materials is predicted to grow strongly, at least in the long term. The most important metal in this context is copper. Electric cars have a much higher copper content than vehicles with combustion engines. In addition, significantly more capacity is needed for (green) electricity transmission. And it must also be taken into account that the triumph of artificial intelligence (AI) requires large amounts of electricity for new data centres.

Copper is currently trading at around 9,000 dollars per tonne in London, 9% higher than a year ago. However, it had reached an all-time high of around 11,800 dollars in May, driven by the hype surrounding AI in particular. Weak demand for electric cars, and doubts about the rapid advance of AI, then put an end to the rally for the time being.

As far as the outlook for 2025 is concerned, Ehsan Khoman, Head of Commodity Research at Japanese bank MUFG, expects a steady rise in prices over the coming twelve months, which should lead to a level of almost 10,000 by the end of the year. However, headwinds for the copper price are to be expected initially, as the market is anticipating US punitive tariffs against China, which will have a negative impact on its economy. Subsequently, however, the Chinese government's measures to support the economy could ensure robust demand, which would need to be met with a limited increase in supply.

For 2026, Khoman expects an average price of 11,600 dollars per tonne, a level close to the all-time high. This would be bad news from the perspective of the green transformation, as such a high price level would make the decarbonisation of the global economy more expensive.

But it could get even worse in terms of the financial viability of the green transition. MUFG predicts a supercycle across the commodities sector, driven by five factors: ESG (environmental, social, governance) driven underinvestment, decarbonisation, the drive for geo-economic self-sufficiency leading to higher commodity sourcing costs and higher inflation, AI, and the sharp rise in defence spending. In the two super-cycles in the commodities sector in the 1970s and 2000s, which lasted around ten years each, the Bloomberg Commodity Index rose by almost 800% and 660%, respectively.

The situation is initially different for lithium, important for batteries used in electromobility. The price has fallen by around 90% from its recent peak, following the end of the initial lithium hype. According to the experts Fastmarkets, however, the market has now reached a certain equilibrium. The price of lithium carbonate has stabilised at 11 dollars per kilo following production cuts in China and Australia, which reduced supply. Nevertheless, prices are now around 50% above the absolute lows of 2020, which has also been helped by the fact that there has been a certain recovery in demand for electric cars worldwide. In China, in particular, significantly more vehicles of this type are being purchased again. September even saw record sales in the Middle Kingdom. The outlook for the lithium price in the New Year is robust, says Fastmarkets. A shortage of lithium is to be expected from time to time in the future. It is then possible that demand will increase as stocks are built up, which could lead to a price surge. In principle, most analysts assume that there will be a shortage from around 2030, which is likely to drive the price of lithium up sharply.

Another metal that is important for battery production is cobalt. According to Fastmarkets' estimates, there was a significant oversupply on the global market in 2024, driven by production in the Congo and Indonesia. However, a higher price level and positive market prospects are expected for 2025. In the longer term, there is likely to be a shortage of cobalt in particular. According to MUFG's calculations, given the climate target of achieving net zero carbon dioxide emissions by 2050, only 19% of the demand for cobalt will be covered by supply in the coming decades. The situation is even worse for graphite, an important raw material for the latest battery technologies – due to the high fire risk of conventional lithium-ion batteries, especially in military applications.

Other raw materials, such as rare earth elements, are also extremely important for the transition to a low-carbon global economy. Although rare earths are anything but rare, their processing takes place almost exclusively in China, mainly due to economies of scale. The trade war being waged by the USA against China could not only make these groups of raw materials more expensive, but could even jeopardise or eliminate supplies to the West, which practically no longer produces these raw materials. China recently imposed counter-sanctions against the USA in this area for the first time. The export of gallium, germanium and antimony, which are also essential raw materials for the production of military electronics, superhard materials and graphite to the USA, is being severely restricted. The price of antimony has already exploded this year from 6,000 dollars to 38,000 dollars per tonne. Thus the escalating trade war also threatens to jeopardise the green transition of the global economy.