Growing demand for raw materials in emerging countries

2 August 2022 – The emerging countries in particular have a growing demand for raw materials. India alone would need at least 16 million tonnes of aluminium per year to meet the growing demand. Especially in the defence, aerospace, transport and alternative energy sectors. And is the Chinese real estate sector in trouble again? And how are the markets reacting to Nancy Pelosi’s possible visit to Taiwan.

Emerging countries with growing demand for raw materials

Especially in the emerging economies, such as Indonesia and India, but also in Brazil and Mexico, industry experts see a growing demand for raw materials needed in the defence, aviation and transport sectors. Or for the development of industries that should or must advance alternative forms of energy such as wind power and solar energy.

India needs 16 million tonnes of aluminium per year

For India alone, for example, it is expected that aluminium consumption will have to grow by at least 16 million tonnes per year to meet current and medium-term needs, especially with regard to the green transformation.

Growing demand: Hungary, Poland, Czech Republic on the move

But Asian and South American countries are not the only emerging economies. In the European Union, too, many member states, such as Hungary and Poland or the Czech Republic, are waiting in the wings to outstrip older and more sedate states, such as Germany, in some areas.

Chinese real estate sector in trouble again?

The Western media landscape in particular has often tried to use the Chinese real estate sector for bad but wide-ranging news. And certainly not everything is in the green when it comes to the real estate market in China. But, as is so often the case, the question arises as to who benefits the most from it.

Food and housing

Two areas in communist-ruled China are essential for social peace in the country. One is food, or the price of food. In many places, food prices are capped, although often not officially. Price increases are not welcomed by traders and are also subject to heavy fines. For the sole reason that there is no social discord due to rising food prices.

Stability in the housing market is of great importance

Availability of housing is a second core issue for social stability in the Asian giant empire. For many Chinese, much like in Western countries, owning their own home is a dream that comes at a high price and often with high debts.

The Chinese government simply cannot afford and will not allow a massive collapse or “complete demise” of the real estate sector. If necessary, it may simply nationalise the entire market – if only to maintain social peace in the country.

This is also made clear by the announcement of the Chinese central bank, which has promised stable financing for the real estate market.

This raises the general question of whether the prophecies of doom with regard to Chinese real estate are really so dramatic or whether another goal is possibly being pursued here.

Commodity markets with slight decline

The commodity markets and also the stock exchanges have reacted as expected to the news about China. They always do so when the world’s most populous state comes into the media spotlight. Therefore, the slightly negative movements in prices today are not really surprising.

Visit of Nancy Pelosi to Taiwan expected

At the same time, the visit of the Speaker of the United States House of Representatives Nancy Pelosi to Taiwan is expected despite urgent warnings from Beijing. The Chinese government sees this as a diplomatic affront and has recently reacted with increased sabre-rattling and manoeuvres on its borders with Taiwan.

Are Speculators taking profits?

The already almost traditional tensions between China, the United States and the island state of Taiwan ensure with nice regularity that there is a certain amount of unrest on the markets and in the end there has once again only been a tempest in a teapot.

This raises the legitimate question of whether the mixture of the real estate market and Nancy Pelosi’s possible visit to Taiwan is not only being exploited by speculators to take a few profits and use the subsequent rise in the markets as a prelude to the next round on the trading floor.

Stainless Espresso: Growing demand for raw materials in emerging countries