China is set to consume about 45% of the world’s copper by 2015 and 48% of all aluminium and nickel, which will support healthy expansion in global demand for industrial metals even as European use will fail to match prefinancial crisis levels in the next several years, says research company CRU group manager for copper and nickel Vanessa Davidson.
This is a significant increase in China’s consumption compared with 13% of copper, 12% of aluminium and 6% of nickel supplied in 2000.
However, this year will be challenging for metal markets as there have been larger surpluses than anticipated in 2012, while copper supply and demand will be in balance.
While most metal markets will be in surplus in the short term, only copper prices will remain significantly above marginal production costs, says Davidson, who will be a featured speaker at the 2013 Investing in African Mining Indaba.
The global economy will only fully recover by mid-2014 and the eurozone will remain in a recession this year with significant downside risk. CRU expects Europe to make up 18% of demand for copper in 2015, as well as 15% for aluminium and 20% for nickel.
Further, the International Monetary Fund estimates that China’s economy will expand 8.2% in 2013, compared with global growth of 3.6%. The London Metal Exchange Index of six industrial metals slumped 23% since February 2011 as European leaders struggled to contain the region’s debt crisis that prompted Greece, Ireland and Portugal to receive sovereign bailouts.