Commodities are one of the best investments this year. Over the past twelve months, the Bloomberg Commodities Index has returned over 44%.
It also outperformed the S&P 500, which returned 40%.
So, over the past year, commodities held their own. But what’s next.
As you know, here at The Financial Star, we don’t only talk about what has already happened. You can read about it in any mainstream media.
We are talking about the biggest trends shaping up in the markets today… and trillion-dollar opportunities that are waiting to be unlocked.
We’re talking about environmental investing… cryptos… new energy… you name it, we are covering it.
And today, we’ll tell you about several critical events that happened recently and what they mean for you and your capital.
The Commodities Sector Is Going Green
You might have heard about “green hydrogen,” “green ammonia,” or “green copper.” In fact, we wrote about these “green” commodities in the past.
The “green” part here means that they are produced in an environmentally friendly way.
In other words, the whole production process is set up to be carbon-neutral. This means that there are no greenhouse emissions at any stage of production.
For example, to produce green steel, traditional producers would burn coking coal.
Now, technology is changing. And instead of the dirty coal, producers will use hydrogen produced with the help of renewable electricity.
The most recent green steel plant developed in Sweden is a case in point.
H2 Green Steel was founded just last year, but it has already raised hundreds of millions of dollars from some of the biggest names in the European industry, like Mercedes-Benz.
H2 will start producing fossil-free steel in 2024, and by 2030 plans to produce about 5 million tonnes of fossil-fuel steel. And some of the biggest European names like Mercedes-Benz crave that “green steel.”
The reason is simple: the most forward-looking companies want to reduce their CO2 impact.
Mercedes, for example, says that on average, its car contains 50% steel. This means that if it can completely replace its “dirty steel” with “green steel,” it can reduce its carbon footprint dramatically.
This is what you don’t hear about from other publications. They are focused on the latest trend while we are looking into the future.
And one of the biggest trends that we see now is the total replacement of all metals and other commodities used in production with their “green” counterparts.
This is a trillion-dollar market. Imagine if every pound of metal in every car produced in the world needed to be “green”… it would put the “dirty” producers out of business or force them to “clean up” their act.
And it has the potential to make the companies that can produce materials in a nature-friendly way the next billion-dollar enterprises.
In our opinion, the “green” revolution could be bigger than the tech revolution of the late 2010s or even the dot-com boom.
This is not something you read about every day. After all, aren’t commodities an “old” industry?
Yes, the mining industry has been around forever. But the “green mining” isn’t the same as the old “dirty mining.” Their end products could look the same, but they are produced in dramatically different ways.
And the biggest clients, like Mercedes or other buyers, will demand proof that the steel or other commodities they put into their products are “green.”
Meanwhile, investors who will align themselves with this vision will reap the benefits of this trillion-dollar megatrend.
And the ones who won’t pay attention might be looking at investment losses in the future…
As a result, we suggest that you take a look at your portfolio and look into how the companies you’re exposed to are handling the green transition.
A lot will depend on how future-proof they are. The ones that are not will need to either adapt or fall victim to the world going cleaner and greener.
As always, protecting your portfolio is paramount.
Thank you for your loyal readership,
The Financial Star team
