PERTH (miningweekly.com) – China is expected to become a bigger market for base metals by 2017 than the rest of the world combined, accounting for 52% of global demand, advisory firm Wood Mackenzie stated in its latest base metals demand forecast.
China’s demand for base metals is currently at around 46% of the 96-million tonnes produced globally.
“Our forecasts for the next five years show that across all of the base metals – aluminium, copper, lead, nickel and zinc – growth in demand will come predominately from China,” said Wood Mackenzie head of base metals market research Helen Matthews on Friday.
Demand growth in the next five years would not be as fast as the previous five years have been, owing to weaker gross domestic product growth in China. But Matthews stressed that demand would only be slower and not lower.
"Demand growth has slowed from the double digits we saw from 2008 to 2013 to single digits – ranging from 5% to 8% - however, it’s important to note that in absolute tonnage terms we still see significant numbers.”
She noted that the global base metals market was set to grow from 96-million tonnes in 2013 to 122-million tonnes in 2018, with a huge shift set to occur in 2017.
“Today, the rest of the world, excluding China, accounts for 54% of the global base metals market, however, as we’re seeing with many other commodities, China’s rampant appetite will overtake the rest of the world, growing to 52% of demand in a 117-million tonne market.”
Wood Mackenzie senior economist Jonathan Butcher noted that while there were a number of factors behind growth in demand for each base metal, a key theme for China was continued urbanisation and rising domestic wealth.
“Wood Mackenzie’s proprietary China Activity Index tracks a number of factors, and gives us confidence that economic growth will remain strong in the short term. Looking out to 2030, we see a bright future for Chinese commodity demand. Urbanisation rates will reach 70%, compared to just under half of the population in 2013.
“This will have a widespread impact on the economy over the next 20 years, with electricity consumption per capita forecast to reach the same level as Korea today,” Butcher said.