Asia in the Driver’s Seat
With over 60% of global copper demand deriving from the Asian region (around 40% from China alone), the outlook for growth in the region will remain an important determinant of copper price performance.
According to Chinese metal research company Antaike, the power sector accounts for over 45% of copper consumption in the country. Industrial output of power cables, a significant source of demand in the power sector, rose by 38% in the 12 months to December 2012.
From a global perspective, copper benefits from a diversified demand base, with applications ranging from electrical and power generation, to construction, to the auto sector. Overall, one-third of demand comes from electrical applications, another third derives from construction, while another quarter is divided evenly between the transport sector and industrial machinery, according to the Copper Development Association (CDA).
Although Eurozone demand is likely to remain sluggish after a 7% decline in consumption in 2012, the US construction industry, which accounts for nearly half of US copper demand according to the CDA, is likely to continue to improve the demand profile for copper. Housing starts have jumped by 18% over the past 12 months, outpacing the 5% gain in overall US construction spending.
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