Danny Esposito, contributor to popular financial e-newsletter Penny Stock Detectives, reminds us that iron ore is the most critical ingredient in producing the most commonly used metal in the world: steel. Steel is 95%-98% composed of iron ore. After only oil, steel is probably the most important industrial commodity used in the world today, says the editor. In his recent Penny Stock Detectives article
, Esposito emphasizes that, since much of the world’s strong growth is coming from Asia—especially China—iron ore has become critical for those countries. Cities have to be built in many of those developing countries, and Esposito says he can’t imagine a more prized industrial commodity than steel in building cities, which means iron ore investing becomes a top priority.
“For a third straight year, India has reduced its exports of iron ore,” notes Esposito. “India previously sent most of its iron ore to China, but the government and the country have realized that it needs the metal to build out its own bridges and buildings.”
As a result, India is expected to produce approximately 150 million tonnes of iron ore in 2012, but will probably export only 30 million tonnes, down over 40% from 2011, according to Esposito. With India cutting back, the analyst says that countries like Australia and Africa have increased their iron ore investing
, as their mining companies are scrambling to supply China’s appetite.
Australia’s largest export commodity is iron ore, reports Esposito. With China buying 60% of the world’s supply of iron ore and India cutting back significantly, the Penny Stock Detectives editor believes this is an opportunity for Australia to further increase its iron ore investing, and its mining companies are taking full advantage.
Africa has a quality of iron ore that is equivalent to Australia’s; the highest grades of iron ore in the world, according to Esposito. He also points out that Africa has been having trouble finding financing for its iron ore investing. China has stepped in and invested significant money in Africa’s iron ore investing and in Africa’s mining companies in order to secure the supply of the metal.
According to Esposito, studies continue to point to the fact that demand from Asia will grow rapidly over the coming two decades, believes Esposito, as these countries build more cities. The Penny Stock Detectives editor emphasizes that investors would do well to explore the mining companies involved with iron ore.
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10, and the stock market in general.
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Sasha Cekerevac, BA, and Danny Esposito, B. Comm., lead editorial stock analysts at Penny Stock Detectives, in conjunction with stock market guru George Leong, B. Comm., have just updated their breakthrough video, If You Missed Apple, Shame on Us; If You Miss This…which highlights a company these stock analysts believe looks very similar to Apple Inc. in its early days. To see the video, visit: http://www.pennystockdetectives.com/video/pt/index.php?sb=PRESS.