Commodities Prices Remain Dependent on China’s Growth, Regardless of a Slowed Down or Not

World prices of commodities will continue to be dependent on China's economic growth, regardless whether its economy is a slowed down or not.

This, as China likewise admitted that its supply of much-needed minerals were already depleting, thus the need to source them still from overseas - a possibly source of good news for Australia.

China, which had been forecast to grow in the 8 per cent to 9 per cent range for the next two years will continue to be the driving force in mining commodity prices. And this will continue even if Europe recovers or continues to sag from its financial woes.

"If the green shoots of recovery in China take place, a mild recovery in prices is likely," Rodrigo de Rato, former managing director of the International Monetary Fund (IMF), said at the Diggers and Dealers mining conference in Kalgoorlie.

Although Chinese commodity consumers continue to be restrained in the conduct of their business, most however expected an improvement in the last remaining months of 2012, Mr de Rato said, noting its demand for iron ore and aluminum will continue to forge on despite the global fiscal crisis.

Mr de Rato's observations seem to have been echoed by China's very own resources minister who confirmed the country will continue to rely on overseas resources to fuel the world's second-largest economy, amid the fact of the stockpile of varied minerals and metals China is building up.

"Given the unequal distribution of resources, there are very few nations that can meet all their own minerals requirements," Mr Xu told the 34th International Geological Congress in Brisbane.

"We will rely first and foremost on our own resources and will step up our domestic production of minerals."

China may have more than sufficient supplies of tungsten and tin, but it has little of iron ore, among others.

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