An estimated 200,000 people every day pack up their lives and move from rural villages and small towns into cities. Almost 70 per cent of the world’s population will be living in cities by the middle of this century. This great shift of humankind is one of the most powerful forces on our planet today.
But urbanisation is not only about where people sleep. It changes the way they live, what they buy, what they eat, at a fundamental level. So the rise of the modern city is rewriting the rules of global commodity demand – the raw materials, energy sources and agricultural products that keep our world going.
The Foundations Of Cities
If a family lives in a rural village, their physical footprint is pretty small. Their home might be constructed of local low-intensity materials such as wood or clay. They travel on dirt roads and they need little electricity. But when the same family moves to a city, everything changes. Cities are so dense that they have to grow up rather than out.
High Rise Construction
Cities crowd millions of people into a small geographic footprint using apartment blocks and skyscrapers. You can’t make these things out of wood, it takes tremendous amounts of steel and concrete. Cement is, in fact, the second most consumed substance on earth after water and urbanisation is the main driver of this demand.
Transport And Infrastructure
A thriving city needs a life blood. It needs subways, multi-lane highways, bridges and massive airports. This infrastructure needs industrial metals in massive quantities.
Power And Connectivity
Think of the wires in the walls of the cities. Every flat, office and streetlamp needs electricity. That has created an unquenchable demand for copper, the ultimate conductor. An urban home needs much more copper wire than a rural home. Multiply that by millions of apartments and you can see the staggering numbers.
Powering the Grid
Cities are loud and bright and moving all the time. They account for more than 75% of the world’s primary energy consumption. As more and more people move to cities, the world’s demand for energy is booming – but the energy we need is changing too.
In history, urbanisation has meant more coal and oil used to run factories and switch on the lights. It still has a huge amount of fossil fuels in it, but modern urbanisation is going on alongside a massive push for green energy and sustainability.
- Electrification: Cities of today run on electricity. Anything from heating and cooling to public transit is using the power grid.
- The Need for Green Tech: Cities are pouring huge dollars into wind, solar and electric buses to help keep city air clean. Ironically, this “green” energy transition is incredibly intensive in terms of mineral commodities. A single electric city bus will consume up to several hundred pounds of copper, not to mention large amounts of lithium, cobalt and nickel in its batteries.
Urbanisation is therefore shifting energy demand away from raw fossil fuels and putting the heat on the metals needed to generate and store clean electricity.
How Urbanisation Changes Food Demand
One of the most visible ways in which urbanisation changes commodity demand is through the food we eat. Nutrition transition is the term for the dramatic changes in diet that occur when people move from rural farms to urban centers.
In rural areas, diets are often based on locally available seasonal and starchy crops such as rice, tubers or maize. Higher average incomes and fast-paced lifestyles in cities change eating habits in three specific ways.
Increased Meat And Dairy Consumption
City populations consume a lot more animal protein. The process of raising livestock requires a lot of agricultural commodities. It takes several pounds of feed to produce one pound of beef. This has caused a dramatic increase in the global demand for soybeans and maize, which are the main ingredients in animal feed.
Processed Foods And Convenience
City workers have less opportunity to cook at home. They depend on packaged, processed and restaurant foods. That means a shift in agricultural demand to essentials for baking and preservation such as wheat (for bread and pasta), palm oil (used in many packaged goods) and sugar.
Luxury Commodities And Indulgence
As their disposable incomes rise, the urbanites develop tastes for premium goods. Emerging cities in Asia and Africa are taking on westernised cafe cultures and global demand for commodities such as coffee and cocoa (for chocolate) is steadily rising.
The Smart And Circular Cities Challenge
As cities grow they face a big problem. Lack of resources. If we keep consuming raw commodities at the current rate to build and feed cities, we will deplete resources. This reality is driving the growth of smart cities and circular economies.
Modern cities are transforming into recycling and urban mining hubs instead of just mining new metals. People are innovating to recover copper and precious metals from discarded electronics (e-waste) and steel from demolished buildings. This will not reduce demand for raw commodities but will determine how commodity supply chains will operate in future.
World Of Raw Material
Urbanisation is the final word on global commodity demand. Every new underground line in Asia. Every apartment complex in Africa. Every supermarket shelf in South America. Tonnes of steel. Miles of copper wire. Megawatts of power. Bushels of grain.