China’s swelling middle class is poised to drive long-term demand gains for metals including copper, zinc and nickel as the world’s second-largest economy transitions to consumer-driven growth, according to PricewaterhouseCoopers Australia.
The urbanization of the world’s most populous nation, which moved about 300 million people to cities in the past 20 years, promises to herald an increased need for metals required to make every kind of consumer product from smartphones to refrigerators, PwC Australia’s Melbourne-based national mining leader Chris Dodd said in an interview.
“We’re heading towards the period in China for the lifestyle metals to really come to the fore,” Dodd said by phone. “If you currently have a mobile phone in your hand you are not going to tolerate a scenario where you don’t have one in the future. If you’ve ever put an air conditioner in your house, you are not going to live without one.”
While metals prices have tumbled this year as the Chinese economy expands at the slowest pace in two decades, copper and nickel are likely to be the first to emerge from the rout in commodities, according to T. Rowe Price Inc. Rising populations and growing wealth in emerging economies will be the primary driver of longer term demand, in particular for industrial metals, energy and fertilizers, BHP Billiton Ltd. said in February.
The impact of demand driven by middle class consumers “is significant right now,” in copper markets, Chile’s Vice Mining Minister Ignacio Moreno Fernandez said in a interview in Melbourne, on the sidelines of the International Mining and Resources Conference. Chile is the world’s top copper producing nation.
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