Discussion on the impact of China's property market slump on steel demand, the importance of copper and aluminum in the energy transition, and price forecasts for iron, copper, and aluminum in 2024.
Continued slump in Chinese property market to impact steel demand in 2024.
Expansion of electricity grids to drive copper demand, while surge in solar power capacity to impact aluminum market.
Deep dives
Steel Demand and the Chinese Property Market
The continued slump in the Chinese property market is expected to have an impact on steel demand in 2024. Despite the Chinese government's efforts to rescue the sector, it will take longer for the industry to recover. However, sectors like shipbuilding and clean energy infrastructure are likely to drive steel demand growth globally. Emerging Asia, Europe's manufacturing sector, and the US manufacturing revival are also expected to contribute to positive momentum in global steel consumption.
Iron Ore Supply and Its Challenges
Global iron ore supply is projected to rise due to new projects and efficiency improvements, but supply may tighten seasonally due to events like the rainy season in Brazil and the cyclone season in Australia. Delays in receiving mining permits and declining ore grades pose challenges for building new copper mines. While the shortage of mined copper could restrict global refined copper output, additional mining supplies are expected in 2024. China's refined copper output is set to increase, but other parts of the world may experience shortages due to political uncertainty and protests.
Copper Demand and Aluminum Supply
Copper demand is driven by public grid expansions for renewable power generation and is projected to increase slightly in 2024. However, there may be stagnation in traditional sectors. Chinese aluminum output is on track to climb further, but European smelters may not resume major operations due to falling regional manufacturing demand. The global primary aluminum output is expected to reach about 72 million tons in 2024, with the market moving into a small surplus. The expanding global solar sector is a key driver of aluminum demand.
On today’s bonus episode of the podcast, Dana is joined by BloombergNEF metals analyst Yuchen Huo, to discuss the things to watch in industrial metals markets in 2024.
Together they talk about what a continued slump in China’s property sector could mean for steel demand, how the expansion of electricity grids will drive the need for copper, and the impact of the ongoing surge in solar power capacity on aluminum.
Complementary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal, on bnef.com or on the BNEF mobile app.