Creamer Media’s Mining Weekly.com
China base metals demand growing 10% more than GDP
21st September 2011
STOCKHOLM – Demand growth for base metals in
China is exceeding its GDP growth rate by 10 percent, and will keep growing, Fan
Shunke, the president of China Non-ferrous Techno-Economic Research
Institute said on Wednesday.
"Base metals demand is about 10% higher
than the GDP growth rate," Fan, who is also chairman of state-backed
research firm Antaike's board, told Reuters on the sidelines of a China
Metal Forum in Stockholm.
Gross domestic product growth was around 9
percent this year, Fan said at the event organised by Antaike and research body
Raw Materials Group.
"In the next five-year period the demand
for base metals will keep growing," he said, although he acknowledged the
global economic slowdown would have an impact on China's economy.
"But with regard to the demand for base
metals it will not be affected because most of the base metals are consumed in
China, not exported," he added. "In the industrialisation of China,
the demand for raw materials is necessary."
China's imports of refined copper surged
21.2% in August compared to the previous month to reach their highest level
since January as improved arbitrage spurred spot buying from the world's top
consumer of the metal.
As the economy deteriorates in the western
world, many metals producers are looking to demand in China to provide a buffer
against the downturn.
The International Monetary Fund on Tuesday
warned of the risk of the severe repercussions on global growth of Europe's
worsening sovereign debt crisis, and a painfully slow US recovery.
It said without action those economies could
tip back into recession.
It also trimmed its forecasts of economic
growth for China and other Asian economies due partly to slower growth in the
rest of the world, although China's economy is still expected to grow a brisk
9.5% this year and 9% in 2012.
DOWNTURN
Swedish copper and zinc miner and smelter
Boliden's Chief Executive Lennart Evrell voiced concern about the demand
for metals with "a downturn inevitable in Europe and the United
States".
He told the China Metal Forum it was likely
China's high growth rate would moderate, "but we should keep in mind that
the share of the world demand in China is at the same time bigger. So if you
model that in, we see that there is still a very favourable impact on the
global demand."
"I think the bottom line is clear - the
western world will keep a constant consumption year after year at best, and be
exposed to the normal business cycles. Whereas the fast growing
countries...will be very very fundamental for the metal demand in the
world."
China's copper raw materials imports rose
almost 50% between 2006 and 2010, despite the financial crisis, Li Yusheng,
a senior analyst at Antaike, said.
In China's 12th five-year economic plan, from
2011 to 2015, copper mining capacity will continue to expand, he said, but the
country will still have to import the metal to make up a shortfall.
China's daily apparent demand for refined
copper surged 18.8% month on month in August and 14.4% from a year earlier on a
23% rise in net imports and record output, after a 4.3% fall in July, Reuters
calculations based on official Chinese data showed on Wednesday.
Edited by: Reuters