China’s commodity consumption is influencing metal prices

As the largest consumer of metals, China dominates the global supply and demand of metals, and Asia is at the centre of the debate on the future of the international mining industry.

Urbanisation continues to increase across the continent, with new housing and increased wealth triggering higher consumption of copper and steel in particular. Asia is also at the centre of the emerging market for electric vehicles. This will drive demand for batteries and their important major constituent metals of cobalt, copper and nickel, plus graphite, lithium and manganese.

The developing nations of Southeast Asia, especially the booming economies of Vietnam, Indonesia and the Philippines, have become important participants in the global supply and demand of metals. In addition to the region’s burgeoning consumption, these nations are also seeing sharply higher metals output with, for example, crude steel production in the region, outside of China, expected to grow at an annualised rate of 14 per cent.

With many metals declining in value last year, the battery metals have been amongst the better-performing extracted commodities recently. Cobalt averaged $US25.32/lb ($35.84) in 2017 and $US33.08 in 2018, nickel $US4.88/lb and $US6.12, and copper $US2.81/lb and $US2.93, respectively. These important metals are expected to hold their value this year; according to S&P Global Market Intelligence, the consensus amongst analysts at the end of 2018 for average prices this year was $US33.48/lb for cobalt, $US2.99/lb for copper and $US6.32/lb for nickel.

These forecasted price increases make Hong Kong, one of Asia’s key financial centres, the ideal location for the Mines and Money Asia conference and exhibition, which will welcome over 500 investors to compare projects across the commodity spectrum.

Indonesian copper projects Merdeka Copper Gold and Asiamet Resources are among the 80 participating mining companies looking to meet new investors. Cobalt and nickel explorer, Deep Green, and graphite developer, Ceylon Graphite will also be in attendance.

Over 150 mining and investment leaders will come together from 2-4 April 2019 to discuss the global mining investment landscape, China’s commodity consumption and the political and macroeconomic influences on the price of base, precious, bulk and battery metals.

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