anufacturers remain the biggest metals users, miners are confronted with the end of the Chinese industrial boom that fuelled global demand and prices. For more than a decade, China dominated markets as it sucked up raw materials to build factories, homes and power lines.
Now, with the industrial engine cooling, mine owners are looking for new uses to spur sales like in fertiliser, electric-car batteries and salmon cages.
“Traditional demand isn’t going to fall off a cliff,” said Paul Gait, an analyst at Sanford C. Bernstein in London. “But it’s true that no one wants to hear about industrial production growth or Chinese cement demand anymore.”
Mining companies have toyed with exotic uses for years, but the search took on new urgency as the economy began to mature in China, the world’s biggest buyer of metals. This year, the country will have its slowest growth in copper use in a decade, Barclays analysts said last month.
Base metals including aluminium and nickel are heading for their first quarterly decline in more than a year. In May, ratings agency Moody’s downgraded China’s sovereign debt, sparking concern that tighter credit will hurt smokestack industries.
Fixed asset investment trailed estimates last month as the country’s property market cooled and the country sought to rein in credit, data showed on Wednesday.
China consumed almost half of the world’s refined copper in 2014 as the country’s demand surged 8.8 per cent from a year earlier, Barclays estimates. Since then growth has been slowing, and by 2020 the bank estimates China usage will increase just 1.5 per cent.
Purdue University in Indiana is purchasing weight-lifting equipment coated with the metal for a new athletic facility scheduled to open later this year. The goal is to reduce instances of flu and viral infections, said Justin Lovett, a Purdue football director.
Cages lined with copper are being used on salmon farms in Chile, Japan, Canada, Australia and Norway to fight the spread of bacteria, said Ricardo Benavides, technical director at EcoSea Farming, which produces the cages in Chile.
Chile’s Codelco, which is the world’s largest copper producer, has promoted using the metal in hospitals, airports and even socks — 1.4 million pairs sold last year in its home market. The company has invested about $US10 million in new applications over the last five years, according to Sebastián Carmona, interim head of Codelco’s technology arm.
Manufacturers in China aren’t taking any chances. Production capacity for copper foil — a component in the anodes used in lithium-ion electric vehicle batteries — is set to double within the next two years as 15 new manufacturing plants ramp up, according to the International Copper Study Group.
Metal producers should take their cue from the aluminium industry to prepare for changes in demand, Bernstein’s Gait said. When oversupply left prices low, aluminium producers invested in downstream ventures to promote the lightweight metal as a substitute for steel and copper in such products as autos and electrical wiring.
“Aluminium isn’t really the best material for these kinds of applications,” Gait said. “But when they found no one wanted to buy their commodity, producers went out and bought downstream assets to develop competitive products themselves.
“Other miners could certainly benefit from taking those k