Commodities giants forced to suspend dividends
Marketplace - 11/12/2015
Everybody blames it on China, which by some measures is fair. That country drives about 40 percent of the world’s copper demand and a downturn in its economy means it’s building fewer skyscrapers. But what about the other emerging markets like India?
Bilge Erten, an economics professor at Northeastern University, said there’s potential in India, but that country’s demand is not there yet.
“You know, the manufacturing sector is booming in India,” she said. “But India is nowhere near a major consumer of commodities to the extent that China has become.”
It’s not just copper. Coal is trading at a 12-year low. Around 70 percent of Chinese coal miners operate at a loss, but they’re still operating and the majors aren’t getting a piece of the dwindling pie. So they’re investing in other commodities. BHP Billiton invested in oil and gas and Anglo American invested in iron ore. Glencore’s biggest investments are still in copper and coal, but it also has major investments in agriculture commodities.