Some News makes people Happy

China’s Renewable Energy Construction increases copper demand


Experts say that the copper market needs to get ready for a supply squeeze, but China’s demand for the metal is set to grow even though the number of new homes being built has dropped.

Bloomberg says that data from CRU Group shows that the growth will come from electric vehicles (EVs) and installations of renewable energy sources. The total demand will go up by 0.8% this year, to 15.55 million tons, which is not a huge amount. However, the data showed that the auto and energy sectors, especially transmission, will grow by 4%, which is a much bigger amount. At the same time, demand from the construction industry will fall by 4%.

Analysts from ANZ said last month that China’s power shortages could help copper demand by getting the government to speed up projects to update and expand the grid.

A big part of the increase in copper demand will also come from the building of more wind and solar power plants.

China’s Renewable Energy Construction

Analysts from ANZ said in August that China’s plans to build infrastructure to provide 1,200 gigawatts of renewable energy capacity by 2025 would require an extra 3 million tonnes of copper. This would mean that solar and wind power would need nearly 1 million tonnes of copper each year.

In the meantime, copper prices are now driven mostly by Europe instead of China. Reuters reported earlier this month that copper prices have fallen and are likely to stay low. This is because a recession in Europe’s manufacturing sector has led to a drop in copper demand.

Analysts say that the decline in manufacturing in Europe is and will continue to be so bad that even China’s higher demand for the basic metal will not be able to make up for it.

“The outlook for the economy outside of China has gotten worse, especially in Europe,” Marcus Garvey, an analyst at Macquarie, told Reuters. “We don’t think China can make up for the slowdown in other ways. Next year, inventories will grow, but it’s hard to say how much.


Leave A Reply

Your email address will not be published.