Copper industry sees green shoots of demand after trade war price slump
SHANGHAI, Nov 14 (Reuters) - The outlook for copper demandin the mid to long term remains healthy despite current tradefriction between China and the United States as a renewableenergy revolution will require vast amounts of the metal,industry executives said on Wednesday.
Delegates at the Asia Copper Conference in Shanghai notedrecent Chinese indicators showed the real impact on demand forcopper-intensive goods as the country's economic growth cools.
For air conditioning and automobiles, "the current situationis becoming weaker," said Pan Hong, senior copper analyst atBGRIMM Lilan Consulting Corp, although she noted infrastructureinvestment was improving and set to be the biggest contributorto Chinese copper demand growth next year.
China's fixed asset investment is "showing tell-tale signsof stimulus," said Mao Yiwei, deputy CEO of Jiangxi CopperInternational Trading Co., who expects more stimulus to improvedomestic consumption, and for there to be some changes in therecent "pessimistic sentiment" on the market.
Copper prices have fallen by around 17 percentyear-to-date on fears the trade row will hurt demand forindustrial metals. Ivan Arriagada, CEO of Chilean miner Antofagasta Minerals , said there was a short-term "disconnect" between thephysical market and the macro sentiment, which was "driven bythe uncertainty of some of the trade tensions that we seetoday."
"But beyond that, I think the fundamental driving forces ofcopper will prevail," he added. "If you look at the dynamics onthe demand side, the boom in infrastructure, consumer goods amidhigher income levels, clean energy and clean transport, all ofthat will mean more demand for copper."
Copper is playing a greater role in the move towardsrenewable energy because it is the most conductive metal.
Jerry Jiao, vice president of China Minmetals Corp, said hesees clean energy lifting copper demand by 2.4 million tonnes by2030, helping sustain demand growth of 3 percent per year.
Of that, solar power will account for an additional 1.48million tonnes, wind for 570,000 tonnes and nuclear power330,000 tonnes.
Furthermore, at least 20 percent of China's car fleet is setto be replaced by electric vehicles by 2030, Jiao noted. That isequivalent to 47 million cars, or 2.8 million tonnes ofincremental copper demand based on a requirement of 60 kg percar, he said.
The recent weakness in copper prices does not reflect along-term price trajectory, said Jiao, who also sees the metalbenefiting from a roll-out of 5G, or next-generation mobilenetworks, which will need copper in base station infrastructure.
(Reporting by Tom Daly; additional reporting by Melanie Burtonin Melbourne; editing by David Evans)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. |