China is on track to exceed the rest of the world in demand for base metals by 2017, becoming the single largest consumer, research consultancy Wood Mackenzie said Friday.
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In its latest base metals demand forecasts, Wood Mackenzie expects China to account for 52% of base metals demand by 2017, compared with 46% of the 96 million mt global base metals market it will account for in 2013.
Head of Wood Mackenzie's base metals markets research, Helen Matthews said: "Our forecasts for the next five years show that across all of the base metals -- aluminium, copper, lead, nickel and zinc -- growth in demand will come predominately from China."
According to the consultancy, China will maintain its global dominance and the outlook for Chinese base metals demand is "slower" not "lower."
"Demand growth has slowed from the double digits we saw from 2008 to 2013 to single digits -- ranging from 5% to 8% -- however, it's important to note that in absolute tonnage terms we still see significant numbers," Matthews said.
Wood Mackenzie says that the global base metals market is set to grow to 122 million mt in 2018 from 96 million mt in 2013.
It notes that a huge shift in demand is set to occur in 2017.
"Today, the rest of the world, excluding China, accounts for 54% of the global base metals market, however, as we're seeing with many other commodities, China's rampant appetite will overtake the rest of the world, growing to 52% of demand in a 117 million mt market."
Senior economist for Wood Mackenzie, Jonathan Butcher, sees a number of drivers for China's demand growth.
He notes that a key theme for China is continued urbanization and rising domestic wealth.
"Wood Mackenzie's proprietary China activity index tracks a number of factors, and gives us confidence that economic growth will remain strong in the short term. Looking out to 2030, we see a bright future for Chinese commodity demand. Urbanization rates will reach 70%, compared to just under half of the population in 2013. This will have a widespread impact on the economy over the next 20 years," Butcher said.
"Our analysis shows that the outlook for key demand drivers is positive, with a firm emphasis on Asia," Matthews added.
Data released Friday by China's national statistics bureau showed that China's economy expanded 7.8% year on year in the third quarter of 2013, reversing a first half slowdown.
China's growth for the first nine months of 2013 came it at 7.7%, above the government's target of 7.5% for the full year.