China’s New Leadership Raises Questions for Future Metals Demand

New leadership in China may change policies on infrastructure spending, raising questions about industrial metals demand, said Ray Key, global head of metals at Deutsche Bank AG.

China will debut its new leadership during the 18th Communist Party Congress starting Nov. 8. The London Metal Exchange index of six industrial metals including copper and lead jumped 10 percent last month as the Asian nation approved plans to build roads, subways, railroads, sewage-treatment plants, ports and warehouses.

“A lot of questions remain about how much emphasis the new leadership will put on the infrastructure build out and the ramifications for industrial metals,” Key said in an interview in London on Oct. 8. “We are looking at lower growth.”

China’s new team inherits an economy that grew at the slowest pace since 2009 in the second quarter as sliding demand from the U.S. and Europe curbed exports of manufactured goods. Copper, used in homes, washing machines and power plants, has gained 6.5 percent this year after falling 21 percent last year.

“Demand is still limited and I don’t see consumers coming back to the point of holding large inventory,” Key said. “They now realize it’s better not to be holding large inventories. I think that’s a structural change.”

Copper for delivery in three months fell 0.4 percent to $8,095.25 a metric ton by 7:18 a.m. in London.

-- With assistance from Agnieszka Troszkiewicz in London. Editors: Claudia Carpenter, John Deane

To contact the reporter on this story: Maria Kolesnikova in London at

To contact the editor responsible for this story: Claudia Carpenter at

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