CRU: One Belt One Road, But Two Commodity Outlooks

CRU: One Belt One Road, But Two Commodity Outlooks

LONDON, August 4, 2017 /PRNewswire/ —

China’s One Belt One Road (OBOR) initiative is described as the single biggest initiative since the opening up of China to foreign investment. In its narrowest sense, it can be described as a trade and investment initiative with more than 60 countries, notably in infrastructure, but it is also designed to expand China’s global influence. But how will it impact commodities?  

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In this CRU Insight, John Johnson, Country Manager, CRU China, introduces a simple framework for looking at the importance of this initiative for the major commodities followed by CRU. The conclusion of this Insight is that OBOR will have an impact on commodity markets, but that there are two distinct groups of commodities for which the influence of this policy varies: “surplus commodities” and “deficit commodities”. Up until now, attention has focused on demand and the impact of China exporting surplus commodities, such as steel. However, China also has an enormous deficit in many commodities, which has an important impact on supply and is an equally important driver behind the OBOR initiative.

Chinas role in production of commodities differs markedly
China accounts for about 10% of world land mass, but its geological endowment is such that it produces different proportions of various commodities. For example, at one extreme, China accounts for 63% of global coking coal production, and at the other extreme, for as little as 5% of global crude oil production, as shown in the chart below.

Read the full story:http://bit.ly/One-belt-one-road

Read more about CRU:http://bit.ly/About_CRU

About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU – big enough to deliver a high quality service, small enough to care about all of our customers.

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Published at Fri, 04 Aug 2017 08:00:00 +0000


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