Copper supply shortfalls may deepen should growth accelerate. China's official purchasing managers' index increased to 50.5 last month, the highest since September, data from the statistics bureau on Feb. 1 showed. India's manufacturing grew at the fastest pace in eight months in January, HSBC Holdings Plc and Markit Economics reported the same day. The Institute for Supply Management's US factory index rose to the highest level since June last month, the group said two days ago.

Raw materials are rebounding from the first annual drop in three years on growing signs the world will skirt another recession and reports that manufacturing is expanding from China to India to the US Investors are betting record-low US interest rates and China's efforts to shore up growth will bolster demand. The optimism is being tempered by Europe's widening debt crisis, with the International Monetary Fund warning it could derail the global economy.

While global growth may be slowing, the consumption of commodities is expanding faster than supply. Morgan Stanley predicts shortages in copper, palladium and iron ore this year and Barclays anticipates the same thing for tin. The London- based bank also expects oil inventories to drop in the third and fourth quarters as production falls short of demand. Rabobank International forecasts deficits in coffee and cocoa.

China's economy will expand 8.1% this year, and up to 8.7% in 2013

China's economic growth will decelerate to around 8.1% this year and edge up to 8.7% in 2013.

China's manufacturing activity is far from optimistic despite the Country's Purchasing Managers Index (PMI) for the manufacturing sector rose slightly in January.

The China Federation of Logistics and Purchasing has said that China's PMI rose to 50.5% in January, the highest level since October. The PMI stood at 50.3% in December, and 49% in November.

The manufacturing sector is currently going through contraction.

He sees China's gross domestic product (GDP) growth will be the slowest in Q-1 and gradually pick up later, bringing the growth rate for Y 2012 to around 8.1%.

China's economy expanded by 9.2% in Y 2011 from a year earlier and 8.9% Y-Y in Q-4, according to the National Bureau of Statistics (NBS). The Quarterly growth was the slowest in 10 Q's. Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com