The investment bank has noted that China’s demand for copper has risen by 8% year-on-year, while interest in iron ore and oil increased by 7% and 6%, respectively, surpassing Goldman Sachs’ expectations for the entire year.

“The strong demand growth is predominantly associated with a combination of strong growth in the green economy, completion of energy grid distribution, and real estate,” noted the report from Goldman.

Even though the Chinese real estate sector is still struggling to recover, the investment bank emphasized that China’s green economy has demonstrated “significant strength” this year, leading to increased demand for metals associated with the transition to green energy, such as copper.

The world’s second-largest economy aims to double its wind and solar energy capacity five years earlier than originally planned by 2030.

According to data compiled by Goldman Sachs, Chinese demand for green copper surged by 71% in July compared to the previous year.

“The most significant growth has come in renewables, where related copper demand has risen 130% since the beginning of the year compared to the prior year, primarily due to growing demand for solar energy,” Goldman wrote in a separate report dated August 25.

A revival in the Chinese manufacturing sector is also boosting demand for base metals like aluminum.

Source: CNBC.com