Is there opportunity mining in China? – 2 share ideas

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As part of our deep dive into China, we look at what opportunity can be found in the mining sector as well as a couple of share ideas to gain exposure.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 24 November 2023

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

You can’t make steel without iron ore, and being the world’s largest producer of steel, China buys around 70% of the world’s seaborne iron ore.

It’s no secret that their property sector is struggling. In theory, this should be putting downward pressure on steel demand and as a result, iron ore prices.

But while they‘re down from the highs of the post-pandemic demand boom, it might surprise you that the price of iron ore isn’t as low as we’d expect. Not only is it sitting comfortably above $100 per tonne (below this and people usually pay attention), but Chinese demand has stayed strong.

What could slower Chinese growth mean for investors?

Infrastructure and manufacturing have been more than offsetting the weakness in the property sector. These are things like electric vehicle production, shipbuilding, and