China is on track to exceed rest of the world demand by 2017, becoming the single largest consumer of base metals. According to Wood Mackenzie’s latest base metals demand forecasts, China will account for 52% of base metals demand by 2017, compared with 46% of the 96 Mt global base metals market in 2013. While China’s lower GDP targets are reflected in lower demand growth for base metals on a percentage basis over the next five years versus the last half decade, the research firm says that China will maintain its dominance and the outlook for Chinese base metals demand is slower not lower.

Helen Matthews, Head of Base Metals Markets research for Wood Mackenzie says; “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. Demand growth has slowed from the double digits we saw from 2008 to 2013 to single digits – ranging from 5-8% – however, it’s important to note that in absolute tonnage terms we still see significant numbers.”

Wood Mackenzie says that the global base metals market is set to grow from 96 Mt in 2013 to 122 Mt in 2018, with a huge shift 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 Mt market.”

Wood Mackenzie’s economic analysis points to the drivers behind this growth as Jonathan Butcher, Senior Economist for Wood Mackenzie explains; “While there are a number of factors behind growth in demand for each base metal, a key theme for China is continued urbanisation 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. Urbanisation 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, with electricity consumption per capita forecast to reach the same level as Korea today.”

Matthews adds; “Our analysis shows that the outlook for key demand drivers is positive, with a firm emphasis on Asia.”