Goldman Sachs has revealed that demand for commodities such as oil and copper in China is booming. The investment bank estimated in a recent note that contrary to its expectations, year-on-year demand for copper, iron ore and oil went up by 8%, 7% and 6% respectively. According to the report, the surging demand for major commodities in China is associated with a combination of property and grid completions as well as robust growth in the nation’s green economy.
China has been a global leader in the nascent solar industry and installed a whopping 96.6 GW of solar energy capacity in 2022, accounting for 42% of the world’s total solar capacity. By the end of the year, the East Asian nation had installed a cumulative 462 GW of solar capacity, 37.5% of the world’s total solar PC capacity of 1,233 GW.
Goldman Sachs noted that while China’s struggling property sector is yet to recover, the country’s green economy has grown significantly this year and contributed to the increase in demand for metals such as copper, which are critical to developing renewable energy technologies. Most of the green economy’s strength was due to a surge in onshore solar panel installations, Goldman says, with this year’s installations surpassing previous years.
China’s operating solar power capacity also surpassed the rest of the globe’s combined at 226 GW, a June Global Energy Monitor report noted, putting the country on track to doubling its solar and wind power generation capacity five years ahead of its 2030 climate goals. With solar panel installations in China increasing by 57% from 2021 to 2022 and predicted to rise even further, Goldman Sachs data shows that demand for copper in the country increased by 71% from July 2022 to 2023.
A separate Goldman Sachs report from Aug. 25, 2023, indicated that the soaring solar-related demand has contributed to a 130% year-over-year increase in copper demand. “Record internal mobility” coupled with a quick recovery in oil-intensive sectors such as transportation have increased demand for oil in the country, Goldman says.
The manufacturing sector’s recovery from the lows of the coronavirus pandemic is also increasing demand for industrial metals such as aluminum, Goldman notes, with manufacturing improvements in Q3 coinciding with increased base metal imports. Improvements in the manufacturing sector also contributed to a 4.5% increase in industrial production from August 2022 to August 2023 and a 5.5% year-on-year rise in the value added of equipment manufacturing.
Goldman predicts further demand growth for green and industrial metals such as copper and aluminum as well as oil in 2024.
The data suggesting that copper demand is ticking up in China is good news to major copper producers such as Southern Copper Corporation (NYSE: SCCO) because an increase in demand for copper in China bodes well for the outlook of the metal on the global commodities markets.
About MiningNewsWire
MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.
MNW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from MiningNewsWire, text “BigHole” to 844-397-5787 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
[email protected]
MiningNewsWire is powered by IBN