Executive Insight – Only real demand counts

Behind the current short-term fluctuations linked to shifting growth prospects lies a powerful uptrend in commodity prices. A deep-seated change in lifestyles in emerging countries is creating new needs in a self-sustaining process that generates ever more demand. At its latest plenary session at the beginning of March, China’s National Assembly confirmed the direction in which markets are moving: industrial metal prices are likely to continue a rally that started a decade ago. Nobody can or should invest in commodities unless they are convinced of the potential demand for capital goods and infrastructure needed to underpin endogenous economic growth, as opposed to export-driven expansion alone. According to the Appliance Manufacturers and China Building Association, copper consumption already amounts to 41 kilograms per home. Looking at China’s 12th five-year plan, the proportion of the country’s population living in urban areas will expand from 47.5 percent today to 51.5 percent in 2015;