Welcome to Money Morning - Only the News You Can Profit From.
Private Briefingwith WILLIAM PATALON III, Executive Editor
Not a member yet? Right now you can get immediate access to Money Morning’s Private Briefing for only $7.99. Click here to get started now.
Click here to get immediate access - for only $7.99.
Members log in:
Not a member yet? Sign up here or learn more.
Chief Investment Strategist
20-year seasoned market analyst and professional trader with highly accurate track record. Specialty in Asian markets.
Global Energy Strategist
35-year expert in oil and gas policy, risk assessment, and emerging market economic development.
Global Investing Specialist
30-year merchant banker, math- ematician, and author. Has a knack for being bearish at exactly the right time.
Capital Wave Strategist
30-year CBOE trader, market maker, and retired hedge fund honcho. Helped launch the Volatility Index in 1993.
20-year commodity guru and portfolio advisor. Top authority on metals + mining stocks. Head- quartered in Canada.
Defense + Tech Specialist
30-year veteran of tech markets with a Rolodex of Silicon Valley CEOs. Pulitzer nominee. Uncovered rare earths crisis.
30-year veteran analyst of business, economics, and financial markets. Award-winning author of "Contrarian Investing."
China announced industrial production data for October today (Friday), showing industrial value-added up 9.6% year-on-year, up from 9.2% in September and 8.9% in August.
This is great news for mining companies.
"Data out today provides convincing evidence that the modest macro recovery we've been anticipating is well underway," wrote Shanghai-based Andy Rothman, China Macro Strategist for CLSA Asia-Pacific Markets. "Industrial value-added, power generation, retail sales and new home sales all improved in October, while inflation remains so low that it is not a policy factor."
Infrastructure investment in October was up 24.9% year-on-year, continuing the rebound begun in September.
Rothman explained, "...this infrastructure rebound is the result of the government fixing approval and financing bottlenecks for projects originally scheduled to be built this year, not due to a stimulus."
Looking at prices, industrial input prices fell by 1.7% year-on-year in October, an improvement from the 4.1% decline seen in September.
"We are starting to see a bit of a bump up in both input and output prices, which is consistent with our view that the growth rate of industrial inventory levels has slowed and a modest macro recovery is underway," Rothman concluded.
This has led some economists to believe that this increase in industrial production in China will be positive for commodity prices, including Li-Gang Liu and Hao Zhou who work for Australian bank ANZ.
If this is the case, it'll benefit the global "mega miners" that have seen their share prices tumble since the slowdown in China began back in 2011.
BHP Billiton (NYSE: BHP), based in Australia, is the world's largest mining company and sells iron ore, base metals, potash, aluminum, metallurgical coal, thermal coal, manganese and oil products to China.
BHP is China's third-largest supplier of iron ore where growing stockpiles in China due to sluggish production had undermined pricing.
But this is starting to change.
The remaining content is exclusively for Money Morning subscribers. To gain access, enter your email address: