Miners Confront China Growth Fear as Boom Era Fades: Commodities

(Bloomberg) — China, the world’s biggest commodities consumer, ignited a $1 trillion spending spree since 2002 by mining companies worldwide as they rushed to supply its booming industrial and construction markets. Now, with real estate development slowing, the global industry’s biggest question mark just got bigger. As thousands of company executives, investors and bankers head next week to South Africa for one of the world’s largest mining conferences, bear markets in iron ore, coal and copper resulting from China’s slowdown will dominate discussions.  “Chinese real estate investment, the single most important commodity demand driver for the past 15 years, is now falling year on year,” said Richard Knights and Ben Davis, analysts at Liberum Capital Ltd. in London, in a Feb. 2 report. The problems are “real,” they wrote, “and we think under appreciated by the market.” The annual Investing in African Mining Indaba convention is the biggest such gathering on the continent. It will draw executives from companies ranging from London-based Rio Tinto Group, the world’s second-biggest miner, and Russia-based United Co. Rusal, the largest aluminum producer. Some see grim warning signs that China’s slowing economy will hinder demand growth for products such as iron ore. Others are optimistic … continue reading

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