Chinese commodities demand being higher than expected helped to break the downward trend in global demand starting in 2011. However, global financial services provider Macquarie advised that the mining industry was still in negative growth territory.
During a teleconference last month, Macquarie commodities research head Colin Hamilton explained that China’s return to a fixed-asset investment model had significantly assisted in improving commodities demand.
He noted that China’s move to invest heavily in fixed assets “exposed the economy to better credit, sentiment and, indeed, better commodities demand” and predicted that the trend would continue into the early parts of 2017.
The higher-than-expected commodities demand was largely due to the recovery in industrial production experienced in most countries, but notably not in the US, Hamilton pointed out.
However, he noted that, despite the improvement in global industrial production, the global industrial economy was still underperforming, but this environment was not completely averse to commodities markets.