The Outlook For Global Metals Demand
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Business Monitor International (BMI) recently published its outlook for global metals demand over the five-year period to 2017. Our below-consensus view on Chinese economic growth and by extension the country’s metals demand presents the question of which countries will be the main drivers of this demand over the coming years. Our main conclusions are as follows:
- China will see a significant slowdown in metals consumption growth over the coming years in line with a deceleration in GDP and construction growth.
- Steel consumption will be hardest hit, with copper less affected as the economy rebalances.
- China will remain the largest source of incremental metals demand over the period to 2017.
- Western countries will continue to see declines due to modest growth outlooks, greater recycling and declines in manufacturing.
- India, Brazil, Turkey, Nigeria and Saudi Arabia will become major drivers of copper and steel demand.
- Metal prices have topped out and we are more bearish than market consensus. However, prices will remain elevated by historical standards.
- Low-cost metal producers such as the large, diversified miners will be best placed to weather the slowdown in global demand growth. Looking beyond a challenging 2013-2014, long-term prospects for these companies remain bright.
The full 2,300-word article, as well as price forecasts for nine different metals, are available to subscribers at Business Monitor Online.
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