China’s economy will maintain 7% to 8% growth: official

April 6, 2011 - 0:0
China’s economy will maintain “stable” growth of 7 percent to 8 percent a year, supporting demand for commodities including aluminum and copper, said a senior official at Aluminum Corp. of China Ltd. Demand for aluminum in the construction sector accounted for more than 35 percent of total consumption last year and is likely to maintain a similar level this year, vice-president Liu Xiangmin said at a conference in Singapore on Tuesday. “There are many large construction projects on the national and town level in the 12th five-year plan,” he said. “Demand will continue to grow.” China’s manufacturing expanded for the first time in four months in March from February, a report showed last week, indicating that Premier Wen Jiabao is succeeding in sustaining growth while cracking down on inflation. The central bank will boost interest rates again this quarter, according to all 20 economists in a Bloomberg survey on March 22. Aluminum prices will increase as the price of oil stays high, driving up energy costs, which account for more than 40 percent of the cost of making the metal, Liu said. “It’s a classic case of prices being pushed up by cost pressures.” “Substitution away from copper and steel in the transportation sector will also support prices.” Still, price gains will be limited by monetary tightening efforts taken by the Chinese government to tackle inflation, Liu said. Copper price increases will also be constrained by China’s cooling measures, he said. Copper around $10,000 is trading “far above cost, and we believe prices will correct this year,” Liu said, without elaborating. (Source: Bloomberg)