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Demand for copper and cobalt set to see rapid growth

  • Friday, July 17, 2020
  • Source:ferro-alloys.com

  • Keywords:Chinese new infrastructure
[Fellow]China's "new infrastructure" construction plan, particularly charging piles for new energy vehicles, 5G base stations, ultrahigh voltage power and intercity high-speed railways, may boost demand for metals like copper and cobalt, industry experts said.
[Ferro-Alloys.comChina's "new infrastructure" construction plan, particularly charging piles for new energy vehicles, 5G base stations, ultrahigh voltage power and intercity high-speed railways, may boost demand for metals like copper and cobalt, industry experts said.
 
"The 'new infrastructure' plan will boost the country's economy and demand for metals as the COVID-19 pandemic comes under better control in the second half of this year," said Zhu Yi, senior analyst for the metals and mining sector at Bloomberg Intelligence.
 
Bloomberg Intelligence estimates that China's new infrastructure construction will require 150,000 metric tons of copper, or equivalent to 1.2 percent of the country's total copper demand.
 
China's State Grid will invest 2.7 billion yuan ($385 million) on 78,000 charging piles, requiring 90,000 tons of copper, it said. "The 550,000 5G stations to be built will add another 20,000 tons of copper demand, and another 40,000 tons will come from ultra-high-voltage power and intercity railways," said Zhu.
 
China has pledged fresh efforts to push forward the construction of "new infrastructure", including next-generation information networks, 5G applications, as well as building more new energy vehicle charging facilities to promote the wider use of new energy automobiles, the Government Work Report delivered at the annual national legislative session said.
 
According to Xu Xianping, a former official of the National Development and Reform Commission, China's investment in "new infrastructure" is expected to reach 17.5 trillion yuan for the 2020-25 period, an annualized growth rate of around 21.6 percent.
 
Benedikt Sobotka, chief executive officer of Eurasian Resources Group, the international metals and mining company, said the "new infrastructure "plan will also boost China's consumption of copper and cobalt and push for structural changes of China's copper and cobalt industry to produce more high value-added products.
 
These projects will continue to strengthen demand for copper and cobalt, as the 5G smartphones alone contain up to 25 percent more cobalt because of the bigger battery, and the cobalt and copper demand will benefit greatly from an improved EV charging network and increased NEV sales, he said.
 
According to Sobotka, the new energy vehicle market in China has been improving steadily despite the pandemic, and demand for both cobalt and copper, which is on an unprecedented upward rally, continues to strengthen.
 
China has been supporting the consumption of cobalt and copper through its policies and strategic direction, including the purchase subsidies extension on new energy vehicles for two years to 2022.It is also encouraging that individual regions in China are taking exceptional steps to promote electric vehicles, including announcements of future bans on diesel and gasoline vehicle production and sales, he said.
 
China accounts for 20 to 25 percent of ERG's total sales, and has been a very important and strategic sales destination for ferrochrome and other ferroalloys, cobalt, copper, alumina and iron ore products, said the company.
 
China's copper demand will decrease this year, according to estimates by Bloomberg Intelligence, as recovery during the second half of the year may not be enough to compensate for the fall in the first six months.
 
Zhu said global copper demand is yet to recover due to the COVID-19 epidemic.
 
Source: CHINA DAILY

 

  • [Editor:kangmingfei]

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