Recognising that a modern economy runs on reliable transportation, the Chinese government has promoted infrastructure development as a top domestic priority.As a result, China‘s demand for steel and copper has risen, apart from a two-year blip in 2008 and 2009, at a high rate since the turn of the century. Over the years, detailed analysis of this continually-evolving scenario has been well-documented in the series of UNCTAD Iron Ore reports prepared by Raw Materials Group. For the first time this year, this unique report has been translated by the China Iron and Steel Association (CISA) and launched into the Chinese market itself. As RMG highlights in the report, China recently overtook the US and Europe to become the world’s largest investor in infrastructure. Between 1992 and 2011 the country spent the equivalent of 8.5% of its GDP on infrastructure (split roughly one-third each on roads, on power, and on rail, water etc). This contrasts with just 2.5% of GDP spent on infrastructure by the US and Europe. According to the government’s plans, China‘s railways will be 54% more extensive by 2015 (at 120,000km) than they were in 2007, and the road infrastructure will have grown 157% to some 139,000km.
During his invited key presentation at the China Iron Ore and Steel Association’s 13th China International Steel and Raw Materials Conference in Qingdao, Anton Lӧf; COO of Raw Materials Group; explained; “The demand for metals is not driven just by economic growth; population growth and urbanisation are also important factors in metals consumption. China‘s growing population of over one billion is only 55% urbanised (compared with India’s 65% and Brazil’s 70%); indicating that demand for steel (iron ore) and copper is likely to continue growing significantly in the years ahead.”Significantly, China is unable to satisfy these metals requirements from its own resources, so opportunities will remain for exporters to the country. Moreover, iron ore and copper are good bellwethers for the entire mining industry. Demand for these metals will inevitably affect coal and other natural resources. Mr Lӧf concluded; “The steel growth figures, although somewhat lower than previously, will, as overall production remains high, result in more iron ore capacity being needed on-stream in the coming years, than in the early years of the ‘super cycle.’ With such important analysis, we are pleased that CISA has taken it upon itself to translate the UNCTAD iron ore market report produced by RMG since 2002. Collaboration between Raw Materials Group and CISA commenced many years ago, and this is just the latest exciting outcome of our fruitful cooperation.”