China will continue its domination of the metals industry but the dynamics are changing, economist Gerard Lyons told delegates at the London Metal Exchange seminar today.

“The three words that defined the last decade were ‘made in China’ but the three words that define the next decade will be ‘bought by China’,” he said.

The traditional trade corridors of Europe to Asia and the US to Asia are not going to dwindle but new trade corridors are going to spring up and become an increasingly large focus for Chinese exporters.

“China is going to be like the two-headed Roman God Janus,” said Lyons, looking both to the traditional corridors but increasingly to emerging corridors.

These corridors are going to be between Asia and Africa, Asia and the Middle East and Asia and Latin America.

China dominates a number of metal and mineral industries including aluminium, coal, magnesia (used in steel industry), rare earths and steel. In the latter it produces just under half of the world total, but has embarked on a process of consolidation – closing small operations.

It is consolidating because overcapacity and weak global demand have already dampened prices and profits.

The intention with aluminium is that, by the end of 2015, the top 10 smelters must account for 90% of the country’s total production capacity. The new government has similar ambitions with its other mineral reserves as well.

When supply of a mineral has been consolidated, China may limit production of that mineral through the issuing of mining or production licenses. This restricted supply is intended to strengthen prices.

However, prices will also improve because China is also going to demand more metals in the future, not all of which it produces domestically, as its population becomes more urban, analyst Jonathan Barnes of Wood McKenzie, told delegates.

“By 2025, a further 700 million people in the world will be urbanised,” he said, “and the majority of the world’s 32 mega cities will be in China.”

Lyons also pointed out that, although overall world trade data appears to be declining, there were some positives to take from the figures.

Trade grew by 5.4% in 2011 but this has decreased to just 2.3% in 2012. Although this figure is expected to pick up again to 2.5% in 2013 growth is remaining muted, according to the ICC’s Rethinking Trade & Finance 2013.

But the reason for this decline is the not an overall global recession but poor economic performance in the eurozone, which accounts for about one third of global trade.

Growth of trade in emerging markets has not contracted and remains unchanged.