Commodity prices for oil (NYSE: USO), gas (NYSE: UNG) and coal (NYSE: KOL) have all fallen due to declining economic growth in China (NYSE: FXI). However, there have been signs of life from the People's Republic. The most encouraging has been increased sales in the Chinese housing sector.
That will result in a much stronger demand for coal, natural gas and oil. Coal (KOL) will be needed for supplying energy, particularly in steel production. Natural gas (UNG) will be needed to heat the buildings. For all transportation and energy needs, oil (USO) will also be utilized in greater quantities.
Along with these commodities, companies such as China Carbon Graphic, Bauxite Resources Limited, and South Boulder Mines could benefit, too South Boulder Mines and Bauxite Resources Limited are mineral companies based in Australia. For all purposes, Australia, particularly its mineral sector, can be considered a foreign subsidiary of China. When the People's Republic is booming, so is Australia.
China Carbon Graphic provides materials that are used in many phases of construction. It is generally used in smelting and industry. China Carbon Graphic was awarded with the distinction of "National Hi Tech Enterprise" by Beijing. In an economy so controlled by the government, that is a very bullish sign.
Studies have shown the role of real estate to be 30% of the economy in China. That is even larger than in the United States at the boom. With a $156 billion stimulus package in place, China is focusing on increasing the activity in the housing market. That is bullish news for around the world.