For those who fear a U.S. recession will negatively impact the prices of nickel, copper, etc., here is an excerpt from an article that appeared yesterday in Resource Investor which indicates nickel and copper prices will remain strong:

India, China lead the world of Base Metals
By Jon A. Nones
SEATTLE (ResourceInvestor.com) -- China and India led the world in consumption of aluminium, copper, nickel, lead and zinc in 2007. This year, demand is expected to rise further despite a looming U.S. economic recession.

GPD growth in United States eased from 2.9% in 2006 to 2.2% last year. In its report on World Economic Outlook, the International Monetary Fund (IMF) argued that the U.S. could fall into recession in 2008, with GPD decelerating to 0.5%.

China, on the other hand, recently revised up its GDP growth for 2007 to 11.9% from the initially stated figure of 11.4%. The IMF said on Wednesday it expected China's GDP growth to slow slightly to 9.3% in 2008, still a rapid rate by global standards.
India's GDP grew at a scorching 9.6% in 2006-07, against 9% in the previous year. It is expected to moderate to 8.7% in 2007-08, after slowing modestly to 8.5% in the second half of last year, according to the IMF.

The IMF said world growth may slow to 3.7% in 2008 from 4.9% in wake of financial crisis. However, growth in Asia as a whole is expected to remain robust at about 7.5% in 2008 and 7.8% in 2009, compared with 9.1% in 2007.

In a Reference Handbook Update of Metals and Forest Products by Dundee Wealth Economics, a Dundee Wealth Inc. company, entitled “World Production, Consumption and Prices of Selected Commodities,” authors Julie Leng, Junior Economist, and Dr. Martin Murenbeeld, Chief Economist, contend that Chindia’s demand for metals will continue to grow.

China’s Base Metals Consumption

China is now the world’s largest consumer of copper, nickel and zinc, and it is among the largest consumers of many other metals as well, according to the report. The country has one of the world’s fastest growing auto, battery and packaging sectors, and is rapidly building railroads, power networks and other infrastructure.

China’s consumption of refined copper grew by 34.67% in 2007. The demand continued climbing from 0.29 million tonnes in 1974 to 4.9 million tonnes in 2007. The consumption per capita rose from 0.71 pounds per capita in 1974 to 8.1 pounds per capita in 2007.

China’s demand for nickel climbed to 352,904 tonnes last year, up 46.98%. The metal is linked to the production of stainless steel, with 60% of nickel usage going to stainless steel worldwide. The National Development and Reform Commission (NDRC) said in a statement that China became the world’s largest producer of stainless steel in 2006 with an output of 5 million metric tonnes.

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India’s Base Metals Consumption

The Indian government has increased focus on infrastructure in recent years. The government’s rural electrification plan and the urbanization of semi-developed cities have rapidly increased demand for metals. This is in addition to heavy investment in construction of high-rise buildings, heavy machinery and bridges.

In 2007, India’s copper consumption increased by 8.58%, which is above the world average of 5.12%. The consumption per capita climbed to 0.86 pound per capita in 2007, a huge increase from 0.17 pounds per capita in 1974.

India’s nickel consumption rose from 2,800 tonnes in 1974 to 16,600 tonnes in 2007. Nearly 67% of nickel output was used to make stainless steel in India. The domestic consumption for zinc was 425,454 tonnes in 2007, an increase of 6.83% from 398,347 tonnes in 2006. India’s lead consumption rose 6.48% in 2007.

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