IWF outlook for Asia: China and India as the main drivers of global growth in 2023

The industrial metals have lost significant ground since mid-April due to economic concerns. In view of mixed economic data from China, the market was sceptical about a recovery in demand in the country. However, the IMF does not share this pessimism. According to its latest economic outlook for the region, it sees China and India as the main drivers of global growth this year. The entire Asia-Pacific region is even expected to be responsible for 70% of the growth with a growth rate of 4.6%. This dynamic contrasts with the development in Europe and the USA, where economic activity is expected to weaken significantly in the coming quarters due to higher interest rates. Nevertheless, we remain optimistic about industrial metals.

After all, the Asian region, and here above all China, is the far more important sales market for most metals. In this respect, a recovery in China, even if it is not as strong as in previous upswings, should be the more decisive driver for industrial metal prices. Against this backdrop, China's latest import figures send a positive signal. Imports of both copper and copper ore increased by 1.6% and 8.4% respectively in April on a seasonally adjusted basis compared to the previous month. This is surprising as satellite data from Earth-i on copper smelter activity signalled a curtailment of operations in April, sometimes due to maintenance at some Chinese smelters. However, robust imports of copper ores may indicate that production could ramp up significantly once maintenance is completed.

Source: Commerzbank Research, Photo: Fotolia