China dominates global production of critical minerals

Demand for critical minerals such as copper, cobalt, lithium and nickel has been increasing in recent years, with these raw materials being used in a range of new technologies, from electric cars to wind turbines, which are becoming increasingly important as the world moves towards a green transition.

Experts estimate that this trend will accelerate, with the global production of cobalt, graphite and lithium expected to increase almost six times by 2050, according to the World Bank, Statista notes.

According to data recently published by the United Nations Conference on Trade and Development (UNCTAD), China accounts for approximately two-thirds of the world's critical minerals processing/refining capacity. Even though the extraction of these materials takes place all over the globe, China currently carries out more than half of the global refining process of aluminum, lithium and cobalt, approximately 90% of that of rare earths and manganese and 100% of that of natural graphite. In addition, more than a third of the world's copper and nickel processing activities are carried out in China, according to the cited source.

While China is leading the production of critical minerals, the nation is losing its dominance as a whole. For example, the United States and Australia have increased their production of rare earths since 2010 and, most recently, Myanmar and Thailand have started to extract much more than before.

According to moderndiplomacy.eu, China today is essential to the production networks in these industrial sectors, and its overwhelming preponderance is a source of considerable unease, of concern that its dominance could be weaponized.

• The price of copper, at the lowest level of the last four months

The price of copper fell yesterday, reaching the lowest level of the last four months, as a result of the weakening of the demand profile prospects in China and the USA, the world's largest economies, informs Reuters.

Signs of stagnation in industrial activity in China, the main profile consumer, have put pressure on the price of copper in recent months on the London Metal Exchange (LME). The copper price has fallen by 20% since it reached the maximum record of over 11,100 dollars a ton in May.

The reference price of copper fell by 1.9% yesterday, in London, around 11:00 local time, to 8,887 dollars/ton, from 8,880 dollars a ton previously. Yesterday's level is the lowest since March 28 to date.

"These markets are connected, all of them. Metals and energy markets are sensitive to macro issues," says Tom Price, an analyst at Liberum, quoted by Reuters, adding: "Equity investors effectively link part of their portfolio to commodity markets - either directly or through indices".

According to Reuters, growing expectations for interest rate cuts by the US Federal Reserve to boost the dollar should ultimately help support demand for dollar-denominated metals.

In the short term, however, the copper market is worried about the increase in LME inventories, which have increased by more than 140% since mid-May to date, reaching a three-year high of 251,350 tonnes.

Most of the copper delivered to LME warehouses in Asia is of Chinese origin, according to industry sources, Reuters said.

Also on the metal market, the lead price dropped by about 1% yesterday, to 2,003 dollars per ton - the lowest level in the last four months. Weak demand and high inventories at the LME are the cause of the base metal's decline.

The price of aluminum decreased by 0.9%, to 2,243 dollars per ton, of zinc - by 0.9% to 2,628 dollars per ton, that of tin - by 1.4%, to 29,775 dollars per ton, and the quotation of nickel - by 0 .4%, to 16,215 dollars/ton.