According to research company CRU, China will support a healthy expansion in global demand for industrial metals even as European usage fails to match pre financial crisis levels in the next several years.

Mr Vanessa Davidson group manager of copper and nickel teams at CRU said that China will consume about 45% of the world’s copper by 2015 and 48% of all aluminum and nickel. That compares with 13% for copper, 12% for aluminum and 6% for nickel in 2000.

The global economic recovery will only be complete by mid 2014 and the euro zone will remain in a recession next year with significant downside risk. CRU expects Europe will make up 18% of demand for copper in 2015, 15% for aluminum and 20% for nickel.

The International Monetary Fund estimated that China’s economy will expand 8.2% next year compared with global growth of 3.6%. The LME 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. While most metal markets will be in surplus in the short term, only copper prices will remain significantly above marginal production costs.

Source - Bloomberg

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