What do others think will be the implications for LMG if China has a massive meltdown in its economy? I have been to China 6 times, have good Chinese friends and watch China news a great deal. There is an underbelly in China that bends, cracks, groans, screams and then covers the entire facade with LED's.
I have a sense based upon a number of factors that within 6 to 12 Months, China is going to face a catastrophic period of economic re-structure. The major catalyst of debt from building, power, armament and rising middle class. (If you take offence to the use of the phrase "middle class" you need to take that up with China).
When I was last in Shenzen (One city with a population of 17.56 million in 2020) , every single bus and taxi (BYD brand - PRC) were fully electric. Hundreds of thousands of taxis and buses! In addition, the variety and volume of other types of electric cars was beyond belief. Shenzen only 6 years ago did not have electric vehicles apart from the very very infrequent Tesla Model 3.
Travel to Fushan or Guangzhou by electric high speed rail at 160kph and observe the hundreds and hundreds of failed or on hold new micro cities and back to back, new and empty high-rise accommodation.
The real estate market went manic for 15yrs. One bedroom apartments with on 70 sqm of for space were USD$350, 000 4 years ago. Now the real estate market is in absolute direstraight with billions and billions in debt and growing repayment defaults.
Lots of other reasons but will leave it there. You may remember that when the Magnesium price went through the roof in about early 2021, it was fueled by massive power shortages and outages in addition to a crackdown on environmental compliance.
The global implications of a Chinese economic meltdown would be wide reaching. At the same time, if the downturn was significant and with a magnesium market ever increaseing, could there be more positives for LMG?
