The copper industry outlook is positive, with the overall demand expected to rise by 6.5% over the next year. The growth is slowing from its high pace in the past three years and is not expected to accelerate further in the coming years. In addition, supply chain bottlenecks are likely to persist into 2022, as major suppliers are increasing their cathode premiums for Chinese buyers. Additionally, increased investment in infrastructure activities in emerging markets will drive demand for the metal.
China's real estate sector is likely to slow next year, limiting demand growth. On the other hand, the rapid growth of renewable energy and electric vehicles will boost copper demand in the country. However, the rapid growth of the real estate sector will slow the growth in 2021 and 2022. According to Refinitiv, the copper market in China will remain subdued through the first half of 2020 and into 2023. These issues will also constrain the growth of the metal in other regions.
The slowdown in China's real estate sector is likely to impact the demand for copper next year. However, the rise of the renewable energy and electric vehicle industries will also contribute to growth in the country. This combination is projected to boost the global demand for copper in the coming years. Furthermore, CRU analysts expect that China's property sector will slow down in 2020 and 2021, but it will likely continue to grow in the coming years.
Despite these factors, some of the problems in China's real estate sector will also affect the overall demand for the metal. In China, for instance, the slowdown in the real estate sector will hamper demand growth. In addition, the global scrap flow is expected to remain constrained. This means that an increase in copper supply is essential to restock depleted inventories. A shortage of supply will likely make the copper market more volatile and exacerbate this problem.
In China, the demand for copper will continue to be a large part of the market's future. Although there is concern about the real estate sector in China, it is still the largest source of copper in the world. It is the primary source of copper for electricity and other products that support the economy. It is expected to grow at a slower pace in 2022. Nevertheless, the growth rate of the electrical industry will increase in this country.
The copper industry is expected to continue to show a strong growth rate in 2021, thanks to the development of infrastructure. The economy in China is expected to grow by 3.3% per annum in 2021, while the global economy will continue to slow in 2022. Besides this, the Chinese demand for other commodities will be down in these years. Aside from electricity, the most important market for copper is the power sector. There will be an ongoing need for steel and other products in China.
In addition to these, China will be a major source of copper. The country's real estate sector will be a major driver of the copper demand in the coming years. Moreover, the use of the metal will continue to grow in the automotive industry, as well as in the building sector. In addition to these two sectors, copper usage will also increase in the renewable energy sector. The demand for the metal will be driven by the growth of solar arrays, wind generators, and geothermal projects.
The copper industry outlook is a mixed one. The overall demand for the metal will depend on the specific sector. The automotive sector is expected to benefit from the increase in electric vehicles, while the building and construction industries will be the other major driver. The growth in the automotive sector will support the production of copper in other sectors. The electrical industry will also benefit from the increased demand. Further, the construction and building materials sectors will help the copper industry by expanding their operations.
There is still a significant amount of uncertainty in the China property sector. While the environmental stainless steel coil and the growing share of renewable energy will support demand for refined copper, indebtedness among some property developers will negatively affect the market. Yet, the Chinese property sector will continue to be a major driver of copper demand, accounting for almost a quarter of the nation's total consumption. Further, the recovery of the construction sectors in the country will support the copper industry's price.