A renewed focus on infrastructure spending by global economies and the rise of electric vehicles will drive the supply-demand trends of the metals market in 2021, according to Trafigura.
In its annual report released on Wednesday, the global commodities trader indicated that while demand for metals like copper will be driven by the growing demand for electricity and EVs, the construction and automotive industries would be the leading consumers of zinc and lead next year.
For aluminum, Trafigura expects demand to return gradually and supply will grow, with a strong futures market and weaker fundamentals resulting in an abundance of supply. Value-added aluminum products especially for the automotive, construction, and packaging sectors are likely to drive demand in this market in 2021.
In 2020, Trafigura traded a total of 20.9mn mt of non-ferrous concentrates and refined metals, up 1mn mt from 19.9mn mt traded in the previous year. Of this total, the company traded 11mn mt of non-ferrous concentrates, up from 10.6mn mt traded in 2019. It traded 9.9mn mt of non-ferrous refined metals this year, slightly more than 9.3mn mt traded last year.
During the year under review, Trafigura indicated it had focused on the turnaround at the Nyrstar zinc and lead smelter that the company acquired in 2019. The business made a loss, but the company indicated that the segment was expected to turn around in 2021 after much of its Capex focused on investing in and upgrading the smelter.
In 2020, Trafigura posted consolidated revenue of $147bn down from $171.5bn in 2019, though its gross profit rose to $6.8bn compared with $2.9bn during the same period. The company’s EBITDA also increased to $6bn from $2.1bn in 2019, while its net profit rose to $1.6bn compared with $900mn during the same period under review.