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BHP Says Metals Demand Will Rise

BHP Says Metals Demand Will RiseBHP Says Metals Demand Will Rise

The world’s biggest mining company has forecast growing demand for its raw materials as 2017 looks set to be the “tipping point” for electric cars, and China’s Belt and Road initiative will boost global iron ore demand.

BHP Billiton’s Chief Commercial Officer Arnoud Balhuizen said Tuesday that 2017 would come to be the “tipping point” for electric vehicles, boosting demand for commodities, mainly for copper and nickel, DW reported.

 “I think if we look back in a few years, we would call 2017 the tipping point of electric vehicles,” Balhuizen said at an event in Singapore, organized by the news agency Reuters.

Electric cars add up to roughly one million, out of a global fleet of closer to 1.1 billion. But BHP forecasts that figure could rise to 140 million vehicles, or 8% of the global car fleet, by 2035.

“Industry forecasts are catching up, the overall consensus is becoming greener,” he said.

According to BHP forecasts, the impact of the change would be felt first in copper, where supply will struggle to match increased demand due to hardly any new discoveries in the last two decades.

The market, Balhuizen noted, may have underestimated the impact on copper demand of what would be a dramatic change, given fully electric vehicles require four times as much copper as cars that run on combustion engines.

China’s efforts to build a new Silk Road are another major factor influencing demand for metals in the near term, according to BHP. The country’s ambitious “One Belt, One Road” initiative could result in additional steel demand of 150 million tons. “This will drive demand for raw materials,” Balhuizen said.

 

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