Anyone who follows the news can tell you that commodity prices have surged because of demand in China, India, and other emerging markets. Other factors figure into why commodities have boomed the last couple of years, but let us focus on the fundamentals for today. Let's look at demand in China.
In "China Shakes the World," by James Kynge, he states in the beginning of his 240-page book about the economic giant that demand will grow as long as the Chinese landscape continues to urbanize. He uses statistics that find 400 million Chinese currently live in towns and cities, but is expected to rise between 600 and 700 million to a total of 1 billion or 1.1 billion people. "Even at that level, China may be only slightly more than 70 percent urbanized, compared with prevailing rates of around 90 percent for the United Kingdom and the United States, just over 80 percent for France and Germany, and 77 percent for Japan."
"The investment required to settle so many people in an urban environment is impossible to calculate with any accuracy, but it is clear that worldwide demand for steel, aluminum, copper nickel, iron ore, oil, gas, coal, and many other basic metals and resources may remain strong for as long as cities in China expand at a rapid clip."
The Business Development Academy, an affiliate of IncreMental Advantage, organizes seminars around the U.S. and will be hosting its "Managing Transactions in China" on Jan. 29 in Boston, March 18 in New York City, and March 31 in Washington D.C. For more information please click on previous link.