News from China that Could Bolster the Mining Industry
Monday, August 15, 2016
News from London’s Capital Economics, an independent research and consulting firm, has the mining industry eyeing the Chinese market with a fresh perspective this month. According to their most recent publication which tracks China’s industrial metals demand, there’s good news for mining companies around the world.
Demand for metals continued to strengthen in July, and industrial activity throughout China is up as well, which corroborates industry data on manufacturing in the country.
Unlike the incredible, and ultimately unsustainable, growth of a decade ago, industrial output has continued to grow by 5 – 6% annually in recent years and the predictions anticipate continued growth at that rate.
Electrical equipment manufacturing in particular may be buoying the demand for metals such as copper, tin, and lead, given the year-over-year expansion of more than 10%.
Fabricated metal products output has grown at the fastest rate since early 2015, contributing to a boost in the price of nickel.
2015 may have been a rough year for steel in China but things are looking up. Already the sector is experiencing a recovery in China, coming close to achieving double-digit rates this year. This may partially explain the recent robustness of iron ore and met coal prices.
While there’s no disputing the strong demand for industrial metals in China, there are still risks in the medium term. A slow down in real estate investment could mean an end to the rebound in construction, which makes up a substantial portion of the renewed growth in steel consumption.
When you need electrical power distribution equipment, controls, and light fixtures for mobile and stationary equipment for your mining operation, give us a call. Our products are designed for both surface and underground mining, and for installations in the coal, salt, precious metals, potash, trona, other metal/non-metal mining industries.
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