There's been a considerable "cooling" in the China commodities story of late.
It used to be that the country was considered the main driver of metals and energy markets. With explosive demand growth helping lift prices around the world.
But recently, investors have been less confident in this theme. Looking at problems like slowing economic growth and possible credit problems, that could dent China's need for resources.
However, news this month suggests the Chinese metals sector is still moving aggressively to secure supply. At least, in one key commodity.
That's the aluminum ore bauxite. A sector where attendees at a recent industry event heard Chinese demand for new mining projects may be ramping up faster than expected.
The news came from the World Aluminium Raw Material Summit 2014 in Yantai, Shandong. Where, according to Black China Blog, speakers were bullish on the future for new bauxite projects in the Chinese sphere of influence.
Especially Yin Zhonglin, Director of Alumina Research Division, Chalco Zhengzhou Research Institute. The industry insider told conference attendees that the recent export ban on raw ore out of Indonesia has given a major push to Chinese companies to find new sources of bauxite supply. With a total of 13 domestic companies now having strong mandates to go abroad and secure bauxite mining projects.
This of course makes sense. In light of the fact that Indonesia was the world's fourth-largest producer of bauxite last year. Putting out 30,000 tonnes of ore--all of which is now in jeopardy under the export ban.
Zhonglin even mentioned where Chinese companies are looking for such mining projects. Singling out Australia, Guinea and Fiji as places where domestic companies are looking for new supply sources.
The news bodes well for aluminum projects within the Pacific and Indian Ocean areas. Especially in combination with recently-rising aluminum prices--which have gained 12% over the last four months alone.
Keep an eye out for acquisitions in this space.
Here's to beating the ban,
By Dave Forest