The energy transition may well be one of the largest projects in human history. Reducing fossil fuel use in favor of electrification will rely heavily on industrial metals such as copper, aluminum, zinc, nickel, and lead. This may create a compelling investment opportunity.

Investors focus on the size of the trend to judge the potential opportunity. Three economic blocks, the US, Europe and China represent $52 trillion of gross domestic product (GDP) that have taken significant steps toward electrification.1 The last prolonged commodity supercycle was driven by China's modernization which, as the chart below illustrates, took a $1.1 trillion economy to a $5.7 trillion economy over the ten years following 2000. There were a wide variety of commodities needed during China's modernization. The energy transition may focus on a more narrow set of commodities that contribute to electrification and infrastructure materials.

Chart: US, Europe, and China representation of $52 trillion of GDP (GDP in millions of USD)

Source: Bloomberg data, 2/3/2000 – 12/31/2022.

Energy is necessary for economic activity and, globally, economies are shifting from fossil fuel-derived energy to renewable energy sources powered by industrial metals. Almost every renewable energy system uses large amounts of industrial metals, including electric vehicles (EVs), wind turbines, solar panels, grid-level batteries and carbon capture systems.

Below provides an outline of the traditional uses of each of these industrial metals, and the role they play in the energy transition.


Key properties of copper

  • Efficient conductor of electricity
  • Corrosion resistant
  • Very ductile
  • Biostatic (Inhibits bacteria growth)

Humans have been using copper longer than any other metal, and for good reason. Archaeologists have recovered copper plumbing components from ancient Egyptian pyramids that are still in serviceable condition now, more than 5,000 years later. Today, the leading copper-producing nations are Chile (26.5%), Peru (10.8%), China (9.0%), Congo (8.2%), and US (5.8%).

The building and construction industry represents the single-largest market for copper. There is nearly 400 lbs of copper wired in in air conditioning systems, food-processing surfaces, doorknobs, and other places in just about each and every American home.

The role of copper in the energy transition

Electrification is a cornerstone of the energy transition. Since copper is so commonly used in electrical work, it follows that demand for copper is very likely to increase in the coming years.

One of the most prominent examples of electrification is within the automobile industry. EVs have become significantly more popular within the last decade, and we expect that more and more will replace fossil fuel-hungry internal combustion engine (ICE) vehicles.3 The average EV holds around 200 pounds of copper – nearly four times as much copper content as an ICE vehicle. There are currently 1.3 billion ICE vehicles globally. As EVs replace ICE vehicles, we'll only become more dependent on copper. And not only do EVs themselves require more copper, but their chargers, both in homes and in public, will require copper, too.

The energy industry itself may also experience massive change in the coming years. The transition of energy to lower-carbon sources should have a significant impact on future demand for copper. Solar panels and wind turbines, two popular alternatives to fossil fuel-driven energy, require a significant amount of copper. Solar panels contain about 5.5 tons of copper per megawatt of capacity, for example. And a single three-megawatt capacity wind turbine can use as much as 4.7 tons of copper.4

Risks associated with copper

In short, the demand for copper may only grow more intense. The energy transition is expected to grow copper demand to 36.6 million tons per year by 2031 from 25.1 million tons in 2021.5 But copper supply has been stagnant between 2016 and 2020, as low prices have curtailed investment. During low-price periods, miners shift production to the sweet spots of higher-quality copper in mines, known as high grading. This leaves lower-quality reserves for periods when the price is higher. What's more is that mine production is almost impossible to increase quickly. That could prove to be a difficult situation as energy uses rise from 4.0% of total copper demand in 2020 to 17.0% by 2030 and under a zero-emission scenario of potentially 54.0% by 2030.4 Sizable new mines are hard to find, no matter how much demand increases. Two years ago, the CEO of Freeport-McMoRan, Inc., the largest publicly-traded copper producer in the world, even went so far as to say that if prices were to double tomorrow, the company would be unable to bring on new supply within five years.6


Key properties of aluminum

  • Lightweight (less than a third of steel)
  • High strength-to-weight ratio
  • High heat conductivity
  • Low specific heat capacity
  • Resistant to saltwater corrosion

Aluminum is the most abundant metallic element in Earth's crust but is also the most energy-intensive of the industrial metals to produce. This is because it takes a large amount of energy to turn the raw ore into the aluminum that we know and use every day. However, 75.0% of all aluminum ever produced is still in use due to it being inexpensive and easy to recycle. Recycling aluminum saves 90.0% of the energy required to make new aluminum.7 In fact, aluminum cans contain triple the amount of recycled content as glass bottles and twelve times that of plastic containers.8 Major aluminum producers today are China (57.6%), India (5.9%), Russia (5.4%), Canada (4.7%), and UAE (3.8%).1

Aluminum's strength and weight make it a good choice for construction of aircraft, railroad cars and automobiles. Its high heat conductivity and low specific heat capacity, which means it cools quickly, make aluminum popular in cooking utensils and ICE vehicle pistons. Aluminum foil, siding, and storm windows are excellent insulators for these same reasons. It can also be used in low-temperature nuclear reactors. Because aluminum can stand up to salt water, it’s often used in boat hulls and other marine devices. National Aeronautics and Space Administration (NASA) is expected to use aluminum to build its next spacecraft.9

The role of aluminum in the energy transition

Like copper, aluminum plays a key role in automobile energy efficiency. Since aluminum is a lighter-weight alternative to steel, many automakers have started using this metal more to help increase vehicle fuel economy. From 2020 to 2030, the demand for more sustainable transportation is expected to help drive an increase in the aluminum content by nearly 100 net pounds per vehicle.10 Furthermore, a US Department of Energy Lab study found that aluminum vehicles offer the lowest carbon footprint of competing materials, as an aluminum-intensive vehicle can achieve up to a 20.0% reduction in total life cycle energy consumption and up to a 17.0% reduction in carbon dioxide emissions.11 Aluminum is even more crucial for EV production as it offsets chassis weight from relatively heavy batteries and improves battery range. As a result, battery housings, e-motors and drive trains, door sills, and rockers are all expected to have higher aluminum content.12

Coated aluminum roofs reflect up to 95.0% of sunlight, making homes and buildings more efficient and less carbon intensive. In commercial spaces, energy efficiency is a key qualifier for LEED (Leadership in Energy and Environmental Design) certification, a standard for which many environmentally conscious corporations reach.13

Risks associated with aluminum

Aluminum use has already increased in the past few decades, and we expect that demand will remain high. But for only the second time in history, supply will be purposely constrained. The first time was in 1994, after the fall of the Soviet Union, when producers agreed to restrict output (recall that Russia is home to the world's second-largest supply of aluminum).

Now, China, the world's largest aluminum supplier, is capping production to meet its goal to be carbon neutral by 2050, since the production process is so energy intensive. If aluminum producers were required to pay $50 per ton of carbon via carbon credits, it would raise the cost of aluminum by 50.0%.14 On top of this, as of April 10, 2023, the US has put in place a 200% tariff on aluminum imports of primary aluminum produced in Russia.15


Key properties of zinc

  • Increasing rise in demand
  • Useful in the production of electric vehicle batteries, galvanized steel, and anti-corrosion coatings
  • Essential nutrient for plants and animals; commonly used in fertilizers

Zinc is the 24th most abundant element in the Earth's crust. This bluish-white metallic element is never found in its pure state, but rather in compounds such as zinc oxide and zinc silicate, among others. It's also in minerals, such as zincite, hemimorphite, and smithsonite. Zinc is used as a protective coating for other metals, such as iron and steel, in a process known as galvanizing. Zinc can be combined with copper as an alloy to make brass. It can also be made into an alloy with aluminum and magnesium. Major zinc producers in the world today are China (32.6%), Peru (12.0%), Australia (10.4%), India (6.1%), and Mexico (5.7%).1

The role of zinc in the energy transition

Zinc is used in energy storage systems for its qualities of recyclability, safety, low cost and zero emissions. These include uses in several battery chemistries used in electronics, industrial, marine, aeronautic, and remote power supply applications.

Zinc-reliant galvanized steel is used in the construction of wind turbines and solar panels, two hallmarks of the clean energy transition. It can also be used in fuel cells, cars, fences, guard rails, tubing, and light poles.

More than two billion people worldwide do not get enough zinc in their diets, with more than 800,000 indirectly dying from zinc deficiency. Zinc deficiency exists in more than 50.0% of the world's soils and it is a crucial micronutrient for higher crop yields.16 Zinc contributes to sustainability as 30.0% of the metal is from recycled or secondary zinc, and zinc extends the lifecycle of steel to as much as 170 years with hot dipped galvanizing.12

Risks associated with zinc

While zinc is useful in pigments, batteries and chemicals, there are substitutes available to use in place of galvanized steel in some applications. For example, aluminum, steel and plastics can sometimes substitute for galvanized sheets.


Key properties of nickel

  • Hard, malleable, ductile metal
  • Used for stainless steel (3/4 of nickel demand)
  • Enhances corrosion resistance
  • Cheaper than cobalt

Nickel has a silvery tinge that can take on a high polish. It's somewhat ferromagnetic and is a fair conductor of heat and electricity. This metal is primarily used in the production of stainless steel and other corrosion-resistant alloys. It's also used in coins to replace silver, as well as in rechargeable batteries and electronic circuitry. Constructing turbine blades, helicopter rotors, extrusion dyes and rolled steel strip all involve nickel-plating techniques, such as electroless coating or single-slurry coating. Major producers are Indonesia (38.1%) Philippines (14.2%), Russia (7.5%), New Caledonia (6.8%), and Australia (5.5%).1

The role of nickel in the energy transition

Nickel is a component of stainless steel. Stainless steel has everyday uses in food-preparation environments, healthcare and easy-to-clean appliances. But it's also useful in power-generation, and pollution control as well as chemical and pharmaceutical production. These industries will all gain traction and experience change during the energy transition.

One US Department of Energy study notes that US electricity demand could increase 38.0% if all sectors of the economy are electrified by 2050.17 Nickel is also used in batteries designed for grid-level storage. Currently, 23.2 gigawatts of grid-level battery storage exists in the US, compared to 1,100 gigawatts of generating capacity.12 It is clear that many more batteries are needed to support wind and solar generators with knock-on effects for nickel demand.

Risks associated with nickel

Nickel is a key ingredient in batteries. However, there has been ongoing battery technology research that could change battery technology and the required ingredients. Lately this has focused on removing or reducing the amount of cobalt in batteries due to energy security issues and difficult artisanal mining conditions in the Democratic Republic of the Congo. These issues do not exist for nickel, removing the motivation to engineer nickel out of the supply chain.


Key properties of lead

  • Corrosion resistant
  • Poor conductor
  • Low melting point
  • High density

Lead is a soft, dense metal that is an important component in battery production due to its low melting point. Its common use in the production of batteries, particularly lead-acid batteries, which are used in a variety of applications including vehicles, backup power systems, and renewable energy installations. Lead's high density and resistance to corrosion also makes it useful to industries ranging from piping to x-rays. Major producers are China (43.1%) Australia (10.7%), United States (6.5%), Mexico (6.0%), and Peru (5.8%).1

The role of lead in the energy transition

Electric vehicles have a lead-acid battery to power security systems, door locks, sunroofs, and other auxiliary systems independent of their main battery systems. Lead batteries are also prevalent in low-cost e-bikes, scooters, skateboards, and hoverboards due to their cost and durability advantages. Elsewhere, the cost advantage of lead batteries shows itself in grid-scale batteries. Grid-scale batteries will be crucial in balancing electricity with intermittent generation from wind and solar.

Lead-acid batteries are used to store energy in a variety of applications, including electric vehicles, e-bikes, and renewable energy installations. Furthermore, a typical lead-acid battery contains 60.0%–80.0% recycled lead and plastic, as nearly 90.0% of lead-acid batteries are recycled.18

Lead is also used in the production of solar panels and offshore wind cables, other key components of the energy transition. The use of lead in solar panels increases their reliability and longevity, and in offshore wind cables lead can provide water protection, longevity and corrosion resistance.

Furthermore, as wind and solar power are intermittent, energy storage is needed to balance grids and save surplus energy. Lead batteries are one of two technologies with the scale and capability to meet this need – and lead batteries are the only one operating in a closed loop in Europe.19

Risks associated with lead

Eighty-eight percent of lead demand comes from battery manufacturers.20 Anytime such a high percentage of demand comes from one use, there exists a substitution risk. It is also the reason lead is so important.

The big picture

These metals all play an important role in the impending energy transition. Therefore, we believe that they represent a compelling investment opportunity. However, as with any types of investments, there are associated risks. The primary threat to our positive outlook is some type of unforeseen event that could halt or delay the global shift toward renewable energy. This includes geopolitical risks which could threaten to steal center stage from governments currently focused on the energy transition.

Another risk is that the infrastructure projects necessary to execute the energy transition don't get through the US Congress. These types of projects include electricity-generation and implementing electric charging networks. But we think that the probability of political hurdles is low, too. Physical infrastructure projects have bipartisan popularity as long as they're predicated upon more US jobs and greater domestic demand for materials.21

While keeping these risks in mind is important, they don't cloud our sanguine outlook. There is evidence that countries agree that metals demand will be higher and more critical to their economic wellbeing. The US Secretary of Energy released The National Blueprint for Batteries, which focuses on battery materials' supply-chain security.22 The EU formed the European Raw Materials Alliance, which also focuses on domestic renewable energy materials' supply-chain security.23 China has been buying up battery raw material mines for at least a decade, while more than 80.0% of processed cobalt, 100% of spherical graphite, and 51.0% of lithium are already coming from there.24

Much of the technology and infrastructure that the transition to a more sustainable world requires cannot be achieved without industrial metals. As more and more nations get serious about their commitments to lower carbon emissions and cleaner energy, we think that the need for these metals will only grow.


Gross Domestic Product is a monetary measure or market value of all the final goods and services produced and sold in a specific time period by a country or countries.
US Geological Survey, 2023
Copper Development Association, Inc., “Electric Vehicles Infographic,” 2023
Copper Development Association, Inc., “Renewables,” 2023
Khan, Yusuf. (2023, April 18). Copper shortage threatens green transition. Wall Street Journal:
Bloomberg, “Freeport’s Adkerson Sees Copper Scarcity Trumping Cooling Effort,” May 27, 2021
The Aluminum Association, “Recycling” 2023
The Aluminum Association, “Aluminum Cans” 2023
National Aeronautics and Space Administration (NASA) is a U.S. government agency responsible for science and technology related to air and space
10 Drive Aluminum, “2023 North American Light Vehicle Aluminum Content and Outlook”
11 The Aluminum Association, “Automotive” 2023
12 The Aluminum Association, “New Survey of Automakers Confirms Aluminum Use Expected to Growth in New Electric Vehicles”, April 10, 2023
13 The Aluminum Association, “Uniquely Sustainable” 2023
14 Institutional Investor, “Industrial Metals May Underpin the Energy Transition”, December 21, 2021
15 Reuters, U.S. to impose 200% tariff on aluminum form Russia – White House
16 Zinc Nutrient Initiative, “Why Zinc” 2023
17 National Renewable Energy Laboratory, “Electrification Futures Study: Scenarios of Electric Technology Adoption and Power Consumption for the United States,” 2018
18 Illinois Library, “Battery Recycling: Battery Recycling Facts”, August 23, 2022
19 International Lead Association, “Which metal will support Europe’s clean energy transformation? Lead”, October 28, 2021
20 “Statistics and information on the worldwide supply of, demand for, and flow of the mineral commodity lead.”USGS, as of May 10, 2023.
21 Wall Street Journal, “Offshore Wind Farms, Big in Europe, Could Boom in U.S. Under Biden,” February 6, 2021
22 National blueprint for batteries, 2021
23 European Raw Materials Alliance, 2021
24 Foreign Policy Research Institute, “Beyond Oil: Lithium-ion battery minerals and energy security,” March 3, 2021


An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 844-ETFS-BUY (844-383-7289) or visit Read the prospectus carefully before investing.

Diversification does not eliminate the risk of experiencing investment losses. Liquidity describes the degree to which an asset can be quickly bought or sold in the market at a price reflecting its intrinsic value.

There are risks associated with investing including possible Joss of principal. Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund's investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund's performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund.

The Fund employs a “passive management” – or indexing – investment approach designed to track the performance of the Index. The Fund will generally seek to hold similar interests to those included in the Index and will seek exposure to many of the commodities included in the Index under the same futures rolling schedule as the Index. The Fund will also hold short-term fixed-income securities, which may be used as collateral for the Fund’s commodities futures holdings or to generate interest income and capital appreciation on the cash balances arising from its use of futures contracts (thereby providing a “total return” investment in the underlying commodities).

Through holding of futures, options and options on futures contracts, the Fund may be exposed to (i) losses from margin deposits in the case of bankruptcy of the relevant broker, and (ii) a risk that the relevant position cannot be close out when required at its fundamental value. In pursuing its investment strategy, particularly when rolling futures contracts, the Fund may engage in frequent trading of its portfolio of securities, resulting in a high portfolio turnover rate.

As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.

During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.

Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Subsidiary to operate as intended and could negatively affect the Fund and its shareholders.

To the extent the Fund is exposed directly or indirectly to leverage {through investments in commodities futures contracts) the value of that Fund may be more volatile than if no leverage were present.

In order to qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company ("RIC”), the Fund must derive at least 90% of its gross income in each taxable year from certain categories of income ("qualifying income') and must satisfy certain asset diversification requirements. Certain of the Fund's investments will not generate income that is qualifying income. The Fund intends to hold such commodity-related investments indirectly, through the Subsidiary. The Fund believes that income from the Subsidiary will be qualifying income because it expects that the Subsidiary will make annual distributions of its earnings and profits. However, there can be no certainty in this regard, as the Fund has not sought or received an opinion of counsel confirming that the Subsidiary's operations and resulting distributions would produce qualifying income for the Fund. If the Fund were to fail to meet the qualifying income test or asset diversification requirements and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income.

Shares in the Trust are not FDIC insured and may lose value and have no bank guarantee. Investor shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Ordinary brokerage commissions apply.

Investors buy and sell shares on a secondary market (i.e., not directly from trust). Only market makers or "authorized participants" may trade directly with the fund, typically in blocks of 25k to 100k shares.

“Bloomberg®” and “Bloomberg Industrial Metals Total Return SubindexSM ” are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by abrdn ETFs Advisors LLC. Bloomberg is not affiliated with abrdn ETFs Advisors LLC, and Bloomberg does not approve, endorse, review, or recommend abrdn Bloomberg Industrial Metals K-1 Free ETF (BCIM). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Bloomberg Industrial Metals Total Return SubindexSM .

ALPS Distributors, Inc. is the distributor for the abrdn ETFs.

ALPS is not affiliated with abrdn.


EFS000478 5/11/24