Around the world, copper producers have started looking to India as the provider of relief in an otherwise somewhat bleak copper market.
The long-term forecast issued recently by the US-based research firm, The Freedonia Group, predicts that India will register the fastest gains of any major copper metal market through 2019.
Strong Housing Demand
Demand in China, the biggest consumer of copper, has started to weaken because of a downturn in its economy. India, on the other hand, has an industry-friendly government in the saddle that’s willing to try investment-friendly policies and that’s, so far, driving driving up the local economy.
The Modi administration’s openness to trade is one of the favorable reasons cited by the Freedonia paper. Another reason is that a strong increase in India’s building construction, driven in part by an expanding urban population and government investment, is expected to boost copper consumption here.
Worldwide demand for copper, says the report, is expected to advance 4.7% every year to 37.2 million metric tons in 2019. It also says the Asia-Pacific region is expected to see the fastest annual gains, led by increased output in China and India. Electrolytic refining of primary copper will be the primary method of production in these countries, but recycled scrap will account for a larger share of refined copper output.
US Construction is Next Best Hope
Outside the AP region, the Freedonia report says advances in construction spending would also fuel copper demand in North America, particularly in the US, where early signs of building construction activity significantly increasing are being recorded. This is followed by Western Europe which could see a “moderate increase” in copper demand since construction and manufacturing output there is expected to climb at a below average speed.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.