Global copper demand to grow 1.2% this year
China remains the key global growth driver for copper, but demand growth from the Asian giant is expected to slow this year, Standard Bank head of commodities research Walter de Wet said this week.
China’s demand, which has been growing at 15.1% a year since 2000, was expected to slow to 6.6% growth in 2012.
European and US copper demand, while still important, would contract this year, given the current economic satiation in European and a slow recovery in sectors consuming copper in the US, De Wet said at the Investing in Africa Mining Indaba in Cape Town.
Global copper consumption is expected to grow by 1.2%, with refined copper demand reaching 20.35-million tons.
“China should once again account for the majority of copper refined consumption in 2012,” De Wet commented.
While there might be concern that a collapse in China’s export market would impact negatively on Chinese copper consumption, De Wet said that the risk was not of great concern, as only 16% of that country’s refined copper consumption went to the export market.
China’s copper usage is primarily local and currently 25% of the metal in China is used in domestically consumed products, which De Wet believed would increase in 2012. “If you look that retail sales continue to grow at 18% to 19% year-on-year, that is a good indication that domestically they are consuming despite tight monetary policy. We believe that copper demand for China will grow by 15% in this sector.”
The Chinese construction industry accounts for the largest portion of copper usage at 55%, though building is expected to slow in 2012 thus impacting the copper sector. “We expect this to decline, but in absolute terms construction in 2012 should still consume the bulk of the copper market.”
De Wet said his research indicated that the copper price would average $7 700/t during the year. “When you look at copper, probably more than many commodities, the supply side has been a big support for the prices and we do expect 2012 to be no different. And while we’re not super bullish on demand, although there is some mild growth, we believe the uncertainty in the supply side will continue to support the prices,” he concluded.
Edited by: Mariaan Webb
China’s demand, which has been growing at 15.1% a year since 2000, was expected to slow to 6.6% growth in 2012.
European and US copper demand, while still important, would contract this year, given the current economic satiation in European and a slow recovery in sectors consuming copper in the US, De Wet said at the Investing in Africa Mining Indaba in Cape Town.
Global copper consumption is expected to grow by 1.2%, with refined copper demand reaching 20.35-million tons.
“China should once again account for the majority of copper refined consumption in 2012,” De Wet commented.
While there might be concern that a collapse in China’s export market would impact negatively on Chinese copper consumption, De Wet said that the risk was not of great concern, as only 16% of that country’s refined copper consumption went to the export market.
China’s copper usage is primarily local and currently 25% of the metal in China is used in domestically consumed products, which De Wet believed would increase in 2012. “If you look that retail sales continue to grow at 18% to 19% year-on-year, that is a good indication that domestically they are consuming despite tight monetary policy. We believe that copper demand for China will grow by 15% in this sector.”
The Chinese construction industry accounts for the largest portion of copper usage at 55%, though building is expected to slow in 2012 thus impacting the copper sector. “We expect this to decline, but in absolute terms construction in 2012 should still consume the bulk of the copper market.”
De Wet said his research indicated that the copper price would average $7 700/t during the year. “When you look at copper, probably more than many commodities, the supply side has been a big support for the prices and we do expect 2012 to be no different. And while we’re not super bullish on demand, although there is some mild growth, we believe the uncertainty in the supply side will continue to support the prices,” he concluded.
Edited by: Mariaan Webb
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