We are not expecting the traditional energy demand to collapse any time soon. Indeed, in this period of cyclical upturn energy demand across the board is very strong.
However, looking longer term, as this transition takes place, demand for coal, oil and natural gas may be weaker while demand for metals will be stronger if governments stick to their climate commitments.
We believe the UN Climate Change Conference of the Parties (COP26) in Glasgow between 31 October and 12 November 2021 will be a perfect opportunity to read the strength of the political will to deliver on these said promises.
If commitments are renewed and strengthened we could see metal prices in particular rise.
Nitesh Shah is director of research for WisdomTree