According to MetalMiner, a metal commodities price intelligence brand, the Renewables MMI (Monthly Metals Index) dropped by 6.01% in May 20231. The index fell month-over-month except for U.S. grain-oriented electrical steel (GOES) M3 which rose by 0.5%. The GOES MMI (Monthly Metals Index) increased by 2.5% in May 2023.
The Renewables MMI has witnessed a decline, with cobalt and silicon prices dropping due to oversupply, while electrical steel remains in high demand. However, the scarcity of transformers poses a significant challenge in transferring renewable energy from solar and wind fields to end-users. With summer approaching, the strain on power grids is expected to intensify, impacting electricity reliability.
Global lithium supply is at a crossroads as demand for renewable energy and electric vehicle (EV) batteries continues to rise. While there is currently an ample supply of processed lithium, long-term price forecasts suggest a potential shortage by 2025. The International Energy Agency (IEA) predicts a tripling of demand between 2020 and 2025, potentially leading to a structural deficit. Despite efforts to increase lithium output, ongoing supply problems are expected due to the growing demand for energy storage systems and electric cars.
The scarcity of transformers, including long lead times of up to 12 months, affects power grid stability, especially during the upcoming summer months and hurricane season. Utility companies are grappling with maintaining consistent electricity and face grid disruptions due to extreme weather events. Transformer shortages have caused delays in electrical grid projects, with some projects at risk of abandonment. Utilities are resorting to purchasing transformers from other countries despite higher costs and extended wait times. As the demand for renewable energy grows, the challenges posed by transformer shortages and strained power grids are expected to persist in the foreseeable future.
Source: agmetalminer.com