Industrialization

Well publicized among energy and material investors is the ravenous appetite the industrializing nations have for base metals and bulk commodities.  From some light reading of BHP’s latest conference call, CEO Marius Kloppers:

“In that sense, it’s important to recognize that approximately 170 million people in China alone are expected to urbanize over the next decade. The progressive shift in the way that these people live and work is driving the transition in growth that you can see on the right-hand side of this slide.

Now over time, economic activity in China will shift from being investment- to being consumption-led, and the demand for various commodities will change. As I’ve highlighted before, we expect steel intensity per capita to peak first, followed by commodities such as copper and aluminum, and then energy and potash demand is linked with economic expansion in the more linear fashion, and we expect to experience both later stage and longer-term demand growth for those products.”

Seems to me TCK is in as good a position as anyone.  Met coal is their current largest division, copper dominates the intermediate term growth, with oil sands for the long term.  Not that BHP isn’t well off.  Per capita peak only means a deceleration in growth rates.  And oh yea, 1.1 billion Indians and hundreds of millions of other Asians are right behind the Chinese.

Source:  Seeking Alpha