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Metals and Mining: Investing Essentials

Tianjin Construction site. Photo credit:

Flickr user Jakob Montrasio

Currently the biggest driver of economic growth in the world is China. In fact, according to analysts at Wood Mackenzie, China will be the single largest consumer of base metals like aluminum, copper, and zinc by 2017. While demand growth in China has slowed from the double digit growth rates of earlier in the decade, its demand growth is still expected to be about 5%-8% per year. Because of this China is expected to account for 52% of the 117 megaton base metal demand in 2017, up from 46% of the 96 megaton market from 2013.

China is clearly a big focus within the metals and mining industry. But the overall health of the global economy also will factor into the industry's outlook. If the global growth outlook weakens it will have a significant impact on the metals and mining industry. Demand for metals doesn't just weaken during recessionary periods, it can dry up altogether. But if global growth exceeds expectations it will be a real boom for the metals and mining industry. Moreover, thanks to its fixed costs the industry will generate large profits for investors during those boom times.

The article Metals and Mining: Investing Essentials originally appeared on Fool.com.

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