June 29, 2006
News Release 06-064
Staff Research Study 28
Contact: Peg O'Laughlin, 202-205-1819
ITC STAFF RESEARCH STUDY EXPLORES IMPACT OF CHINESE GROWTH
ON ENERGY AND OTHER COMMODITY MARKETS
China's stunning economic growth in recent years, particularly in the manufacturing sector, has
increased the country's demand for energy and other commodities, which has affected wider
global commodity markets in complex ways. The impact of rising Chinese demand on four key
commodity markets is explored in The Effects of Increasing Chinese Demand on Global
Commodity Markets, a new staff research study by the U.S. International Trade Commission
(ITC) Office of Industries.
The research study was prepared by ITC staff. The findings included in the publication are those
of the author and do not necessarily reflect the views of the U.S. International Trade Commission
or any of the Commissioners.
Principal findings for global commodities markets include:
- Crude Petroleum: Increasing Chinese demand is one factor contributing to price
increases for crude petroleum in recent years, but global production over the 1995 2004
period more than kept pace with the increased demand from China, mitigating the impact
of Chinese demand on prices. Sharply rising energy prices are due more to international
political shocks than Chinese economic growth, according to the study.
- Aluminum: China has increased imports of alumina, the primary input to unwrought
aluminum, over the past decade but has expanded domestic production of unwrought
aluminum so much that the country has become a net exporter of the more finished
product. However, China's increased imports and consumption of alumina have
contributed to global price increases for unwrought aluminum and are changing the
dynamics of the global aluminum market in important ways.
- Forest products: China has increased its production of wood and paper products and
become a net exporter of paper products through intensive foreign and domestic
investment in new sawmills and paper mills. However, since forest resources are not
abundant in China, Chinese mills are largely dependent on imports of logs and wood pulp.
- Ferrous scrap: Global market prices for ferrous scrap have increased rapidly since 1995,
reflecting strong growth in global demand, particularly from China, Turkey, and other
Asian steel-producing countries.
The Effects of Increasing Chinese Demand on Global Commodity Markets (Staff Research Study
No. 28, USITC publication 3864, June 2006) is available on the ITC's Internet server at
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