Seoul; 26, December 2015: If you're looking for a sign that the metals and mining sector may finally be turning around, start by counting the number of construction cranes and bulldozers in China. Amid its own faltering economy, Beijing seems to be fast-tracking infrastructure projects and offering incentives to spur growth.
For the battered commodities market, such news couldn't come at a better time. More than a few indicators now point to better prospects for the metals and mining sector, according to a recent Benckiser Roth Research report.
In addition, Benckiser Roth’s China material analyst, Tang Cheung, mentioned in his recent report, “Greater China Cement: Demand Bottoming and Consolidation Lead to Price Recovery, Time to Buy Cement,” that recent central government policies on infrastructure-funding and pushing local governments to start projects on time will likely lead to stronger infrastructure demand.
“Emerging markets and China in particular remain key to commodities demand," says Donald Chee-hwa, Benckiser Roth's metals and mining equities analyst. “In the next few months we expect the perception around this demand to improve."
While most of us follow the rise and fall of the broader equity markets, the commodities market has been quietly tanking for nearly two years. As the world moved out of the last recession, metals and mining companies began ramping up operations to meet renewed need for materials, flooding the market with product in the process.
However, signs of improvement abound, and after a rocky road, the metals and mining sector may be in for a smoother ride.
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