SHANGHAI, Feb. 22 -- Preliminary data for world production and consumption of the six LME metals released yesterday by the World Bureau of Metals Statistics showed that five of the six (lead was the exception) were in surplus in 2009. In every case the surpluses would have been much larger had it not been for a big increase in China's imports. China spent US$24.95 billion on imports of LME metals last year, up from $17.57 billion in 2008 despite the fact that metals prices were much lower. However an unknown proportion of these purchases were accounted for by unreported stock-building, which WBMS does not take into account in its calculations of apparent consumption.
WBMS estimated that the global tin market was in surplus by 12,900 tonnes in 2009, following a 4,800 tonne deficit in 2008. The larger copper and zinc markets registered surpluses of over 200,000 tonnes while in primary aluminium the surplus was close to 600,000 tonnes. In nickel the indicated surplus was a marginal 3,000 tonnes, while lead was in deficit by 19,900 tonnes.
The Bureau's calculations of changes in world demand in 2009 are heavily influenced by China's stock-building, with apparent consumption in China increasing by between 12% for tin and 77% for nickel. Including this big boost from China, global demand for copper, lead and nickel rose by about 1.8% in each case, while apparent consumption of the other three metals fell. The biggest fall was recorded by tin (-4.7%), compared to -2.6% for zinc and -3.5% for aluminium.
Commenting on the comparisons between the metals, WBMS Managing Director Sue Eales told us: "tin is not so dependent on Chinese demand to balance the books. Hence it will not feel the cold breeze if China decides to cut consumption of metals and there are not necessarily the same high stock levels for tin as there are for copper and aluminium".