China-AsiaStocks.com (CAS), an investor and industry news portal for the China-Asia sector, provides an overview “Supply and Demand Issues Fuel China’s Automobile, Steel, and Coal Industries”. Massive construction projects all over China are spurring the growth in the steel and coal industry as well as in the heavy duty vehicle and commercial vehicle market.
SORL Auto Parts (OTCBB: SAUP) is meeting the increasing demand as a manufacturer and distributor of automotive air brake valves and hydraulic brake valves mainly for the commercial vehicles market. David He, SORL’s Senior Manager of Investor Relations and International Business Strategy and Planning explains, “The trend of urbanization gives China's construction sector a historic opportunity. The booming construction sector also stimulates the development of construction materials and construction machinery, resulting in tremendous increase in demand for transportation, particularly the use of heavy duty vehicles.”
Jie Li, Investor Relations Officer for China Automotive (NASDAQ: CAAS) states, “Infrastructure build up reflected in highway, transportation and bridge construction will continue to increase. With the trend of global purchasing of auto parts, the Chinese auto parts market will enjoy 20% annual growth.”
The Chinese steel industry has continued to experience double digit annual rates of growth as it has worked to keep pace with the construction boom with Mittal Steel (NYSE: MT) showing great confidence in China’s steel industry through its acquisition efforts.
As China continues to expand its infrastructure demand for coal is on the rise globally and within China. Puda Coal (OTCBB: PUDC), a Chinese coking coal producer, is benefiting significantly from the high profitability provided by this trend. According to Puda CEO Zhao Ming, “The factor that drives the demand for coking coal is the mass construction of infrastructure, including but not limited to real estate development, extended urbanization process, western region development and the 2008 Beijing Olympic Games. These projects require the use of large amounts of steel, and coking coal is essential in making coke, which is largely used in the steel making process.”
Mark Lidiard, Vice President Investor Relations and Communications in BHP Billiton (NYSE: BHP), the biggest coking coal producer around the world states, “Metallurgical coal is used in steel making industries, and incremental demand for metallurgical coal is primarily being driven by the growth in the Chinese steel market.
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Featured Company Disclosure: (CAS is compensated by SORL and PUDA as disclosed in disclaimer.)
Puda Coal, Inc. (OTCBB: PUDC) through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently produces 1.1 million metric tons of cleaned coking coal annually, and management believes it is one of the largest suppliers of top grade coking coal in the Shanxi province of China. Shanxi province provides 20-25% of China's coal output and supplies nearly 50% of China's coke.
SORL Auto Parts, Inc. (OTCBB: SAUP) is engaged primarily in the manufacture and distribution of automotive air brake valves and hydraulic brake valves mainly for the commercial vehicles market, such as trucks, vans and buses, in the People's Republic of China (PRC). The Company distributes products both in China and internationally under SORL trademarks. The Company's product range includes 36 types of brake valves with over 800 different specifications.
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Source: China-AsiaStocks.com, MT, PUDC, SORL, CAAS, BHP