But recovery may be slow as demand outside China is shaky, producers say As the global economy recovers from the worst recession in 70 years, industrial metals are expected to stay on a recovery path this year, but metal producers warn that the advance may be slow as demand remains shaky. Among the positives for demand are the impact of lean producer inventories, government stimulus programs and Chinese consumption, analysts said. Global economic growth is starting to pick up as a result. "We're not expecting particularly strong growth in the world outside China, but we are forecasting global growth will move from a decline of one per cent in 2009 to a gain of 3.7 per cent in 2010. That's a strong inflection point," said Bart Melek, BMO Capital Markets global commodity strategist. He also sees global industrial production recovering from a 12.5-per-cent decline in 2009 to a 3.2-per-cent increase in 2010. That all means more demand for everything from copper pipes to aluminum for auto and aircraft production and zinc for galvanized steel. This demand picture will be analyzed closely at the Reuters Global Mining and Steel Summit in New York, London, Sydney and some other major cities around the world this week. Top executives of leading mining companies and owners of such downstream operations as smelters will discuss their outlook for the industry in 2010 and beyond. The heads of gold, silver and palladium miners will also be in attendance after recording a strong performance in the past year. Analysts said they continue to see investors using gold as a hedge to protect against political risk, sovereign debt issues and inflation. And, though metal industry executives agree the economy has improved, they also continue to report uncertain order levels from many sectors of the global economy. "Business is still weak for us in the developed world, in the U.S., Japan and in Europe. But the long-term outlook is good," Richard Adkerson, CEO of Freeport-McMoRan, the second-biggest copper producer, told investors last week. "When you add in any recovery in the developed world with the opportunity in China and other developing countries, you get a positive outlook for demand in the long run," he added. John Surma, U.S. Steel Corp. chief executive, said in a recent interview with Reuters: "In my view, the worst is probably behind us. The trajectory we're on is better, but there's some ways to go yet. "We're moving in the right direction. But end-use demand? We're still very cautious about that." At last year's summit, numerous chief executives talked about signs that they were skidding at the bottom. This year, the talk is how fast things will pick up. Metal prices have already climbed above last year's averages. For example, copper is currently trading about $3.40 per pound, much higher than the 2009 average at $2.34. Spot aluminum prices are running at 98 cents per pound and averaged 75 cents last year. And, U.S. Midwest hot-rolled coil steel was last priced at $625 per ton, well up from $500 a year ago.

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