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, according to research company CRU.
China will consume about 45 percent of the world’s copper by 2015 and 48 percent of all aluminum and nickel, Vanessa Davidson, group manager of copper and nickel teams at CRU, said today in a presentation at a London Metal Exchange conference in the U.K. city. That compares with 13 percent for copper, 12 percent for aluminum and 6 percent for nickel in 2000, according to a copy of her presentation.
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,” according to the presentation. CRU expects Europe will make up 18 percent of demand for copper in 2015, 15 percent for aluminum and 20 percent for nickel.
China’s economy will expand 8.2 percent next year, compared with global growth of 3.6 percent, the International Monetary Fund estimates. The LME Index of six industrial metals slumped 23 percent 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, according to CRU.