Real Chinese Rebar Prices Below 2009 Lows
- Weak Construction: Falling Chinese rebar prices are a reasonably real-time indication that construction activity in China may be slowing.
- Negative for Mining Investment: Mining investment has been very robust (we’ve called it a bubble). Chinese demand for materials has been central to global mining investment.
- Mining Equipment: If fixed asset investment slows, equipment producers like CAT could see demand for resources-related equipment evaporate.
- Exposure to Developed Market Construction Rebound: It is difficult to find capital equipment exposure to cyclically depressed developed market construction activity without getting exposure to slowing developing market construction markets. We think that the Commercial Truck OEMs provide an effective and less risky way to increase portfolio exposure to developed market construction. We are presenting our Black Book on Commercial Trucking August 16th at 11AM.
UPCOMING EVENT: On August 16th at 11:00AM we will be hosting a call on the launch of our Trucking OEM Black Book that will discuss Navistar, PACCAR, Cummins and other key names in the space.