| How China’s Real Estate Market Drives the Global Copper Industry | |
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Key Indicators Freeport Investors Should Track (Part 5 of 17) (Continued from Part 4) China’s real estate market
We previously discussed how the Chinese government has given its support to its domestic copper industry. The Chinese real estate market also played its part in the country’s growth in copper consumption. In this article, we will look at various factors that drove the Chinese real estate industry.
Urbanization
China has a population that is almost four times that of the US population, outnumbering the United States ~1.39 billion to 320 million. The population was largely based in villages until China opened up its economy in the late 1970s. China soon became an export powerhouse, manufacturing everything from toys to trains. This economic shift enticed a large population of workers to leave their villages to seek employment in upcoming urban industries.
The net result of this population shift is that more than half of China currently lives in cities, compared to around 10% in 1949. There was a huge population that wanted to upgrade from their long-time substandard living, and the country’s rapid urbanization gave them this opportunity. China’s housing market got a boost from this urbanization, and the per capita copper consumption in China soared as a result.
Major market for global players
China has become a major market for global mining giants like Rio Tinto (RIO). As shown in the above chart, Rio Tinto now gets 35% of its revenues from China, as compared to only 8% in 2003. Other major producers like Freeport-McMoRan (FCX), Teck Resources (TCK), Glencore (GLNCY), and Vale (VALE) also benefit from the higher demand from China. Glencore currently forms 2.82% of the iShares Global Materials ETF (MXI). Freeport currently forms 3.1% of the Materials Select Sector SPDR ETF (XLB).
Along with this demand from end users, a great deal of speculative money also found its way into China’s real estate markets. This is one of the reasons behind the current slowdown in its economy. We will discuss this phenomenon in detail in our next article.
Continue to Part 6 Browse this series on Market Realist:
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Freeport McMoRan Copper and Gold Inc.
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 69.9 billions as of today (€ 65.2 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 24, 2024 at US$ 48.24. Freeport McMoran has 1 448 000 000 shares outstanding. |