China and emerging markets will keep driving demand
The commodity supercycle has further to go on increasing demand from China and emerging markets, according to Longview Economics Ltd. and economist Dambisa Moyo.
Raw materials have been in a supercycle since 2001 and the average length of each phase since the late 1700s has been almost 21 years, Chris Watling, chief executive officer of London-based Longview Economics, said today at a World Commodities Week conference in the U.K. capital. ...
Emerging market and developing economies will grow 5.3 percent this year, compared with 3.3 percent globally, the International Monetary Fund said Oct. 9. The Washington-based group estimated growth of 7.8 percent for China this year and 8.2 percent next year. Raw materials, as measured by the S&P GSCI, have risen for most of the past decade, making annual advances in 11 of the last 13 years.
"It's all about what's happening in emerging markets," Moyo, a former Goldman Sachs Group Inc. economist, said in a presentation at the conference. Improving wealth levels "have implications for what we'll eat" and more people will want consumer products, she said.
Moyo pointed to more urbanization globally as why there will be higher demand for some commodities. Increasing urbanization in China, the biggest user of industrial metals, means more demand there for consumer-driven commodities, Richard Elman, chairman and executive director of Hong Kong-based commodity supplier Noble Group Ltd., said at a London Metal Exchange conference in London Oct. 15.