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China’s Staggering Demand for Commodities

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China's Staggering Demand for Commodities

China’s Staggering Demand for Commodities

>50% of all steel, cement, nickel, and copper goes there

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

It’s said that in China, a new skyscraper is built every five days.

China is building often, and they are building higher. In fact, just last year, China completed 77 of the world’s 144 new supertall buildings, spread through 36 different Chinese cities. These are structures with a minimum height of 656 feet (200 meters).

For comparison’s sake, there are only 113 buildings in New York City’s current skyline that are over 600 feet.

Unbelievable Scale

It’s always hard to put China’s size and scope in perspective – and we’ve tried before by showing you 35 Chinese cities as big as countries, or highlighting the growing prominence of the domestic tech scene.

Today’s chart also falls in that category, and it focuses in on the raw materials that are needed to make all this growth possible.

Year of dataCommodityChina's % of Global DemandSource
2017Cement59%Statista
2016Nickel56%Statista
2017Coal50%NAB
2016Copper50%Global X Funds
2017Steel50%World Steel Association
2017Aluminum47%MC Group
2016Pork47%OECD
2017Cotton33%USDA
2017Rice31%Statista
2017Gold27%China Gold Association, WGC
2017Corn23%USDA
2016Oil14%Enerdata

Note: Because this data is not all in one easy place, it is sourced from many different industry associations, banks, and publications. Most of the data comes from 2017, but some is from 2016.

China Demand > World

There are five particularly interesting commodity categories here – and in all of them, China’s demand equals or exceeds that of the rest of the world combined.

Cement: 59%
The primary ingredient in concrete is needed for roads, buildings, engineering structures (bridges, dams, etc.), foundations, and in making joints for drains and pipes.

Nickel: 57%
Nickel’s primary use is in making stainless steel, which is corrosion resistant. It also gets used in superalloys, batteries, and an array of other uses.

Steel: 50%
Steel is used for pretty much everything, but demand is primarily driven by the construction, machinery, and automotive sectors.

Copper: 50%
Copper is one of the metals driving the green revolution, and it’s used in electronics, wiring, construction, machinery, and automotive sectors, primarily.

Coal: 50%
China’s winding down coal usage – but when you have 1.4 billion people demanding power, it has to be done with that in mind. China has already hit peak coal, but the fossil fuel does still account for 65% of the country’s power generated by source.

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Electrification

The Biggest Mining Companies in the World in 2021

The graphic takes a look at the world’s largest mining companies by market capitalization and the metals they produce.

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The Biggest Mining Companies in the World in 2021

Ranked: The Top 20 Mining Companies

Mining companies have emerged from the COVID-19 pandemic in excellent financial and operational shape and the forecast is even brighter as the economy recovers.

The market is expected to reach a value of nearly $1.86 trillion by 2022, with the increasing demand for minerals for power generation and renewables technology.

In the graphic above, we show the world’s top companies by market capitalization as of June 22, 2021, and the metals they mine.

The Bottom Line: From Smartphones to Food

From roads, hospitals, automobiles, houses, computers, satellites, and even fertilizer for crops, mining provides many of the materials we interact with every day. Copper, iron, rare earth metals, aluminum, and phosphate are just a handful of the mined materials that make modern life and feed the bottom line for mining companies.

The two biggest by market capitalization, BHP ($179B) and Rio Tinto ($132B), both produce a range of commodities, mainly iron ore and copper. The next on the list is also the biggest company in Brazil, Vale ($112B). The miner is the world’s largest producer of iron ore and pellets (small balls of iron ore) used to manufacture steel.

CompanyMarket Cap (USD)Country Main Mining Activity
BHP$179B🇦🇺 Australia iron ore, copper, coal
Rio Tinto$132B🇦🇺 Australia iron ore, aluminum, copper
Vale$112B🇧🇷 Braziliron ore, nickel
Glencore$55B🇨🇭 Switzerlandcopper, cobalt, zinc, nickel
Norilsk Nickel$54B🇷🇺 Russiapalladium, nickel
Freeport-McMoRan$52B🇺🇸 United Statescopper
Anglo American$52B🇬🇧 United Kingdomdiamonds, copper, platinum, iron ore, coal
Fortescue Metals$51B🇦🇺 Australia iron ore
Newmont Goldcorp$50B🇺🇸 United Statesgold
Southern Copper$47B🇺🇸 United Statescopper
Zijin Mining Group$38B🇨🇳 Chinagold, copper
Barrick Gold$37B🇨🇦 Canadagold
Nutrien$34B🇨🇦 Canadapotash
Anglo American Platinum$28B🇿🇦 South Africaplatinum, palladium, rhodium
Franco-Nevada$28B🇨🇦 Canadagold
Polyus $27B🇷🇺 Russiagold
Ganfeng Lithium$24B🇨🇳 Chinalithium
Wheaton Precious Metals$20B🇨🇦 Canadagold, silver, palladium, cobalt
Antofagasta $19B🇬🇧 United Kingdomcopper
Ma’aden$18B🇸🇦 Saudi Arabiagold

A $57 billion gap separates the top 3 from the rest of the group. In fourth place comes Glencore ($55B) with its mixed operations of trading and mining metals, agricultural products, and oil and gas.

The automotive industry is a big consumer of metals, which explains Norilsk Nickel’s ($54B) fifth place. The company, owned by the wealthiest man in Russia, is the world’s biggest producer of palladium, used in vehicles’ catalytic converters.

Miners also serve the luxury market, with precious metals like gold, silver, and gemstones. Number six on the list, Anglo American ($52B) is one of the world’s leading diamond companies.

In terms of countries, Canada leads the ranking with 4 miners on the list. The United States and Australia come next with 3 companies each.

Charging and Changing the Future of Mining Companies

The United States, Europe, and Asia are making big investments in electrification and power generation. By 2024, almost 33% of the world’s electricity is forecast to come from renewables.

This shift from fossil fuels will require a lot of copper, cobalt, and lithium for batteries. Mining companies are in a position to capitalize as the market expands.

For example, no. 17 in the list, China’s Ganfeng Lithium, the world’s third-largest producer of lithium chemicals for batteries, saw its market capitalization grow more than 25% in 2021.

The energy transition is just beginning, and the materials used in building a more sustainable future will also build up the largest mining companies of tomorrow.

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Urbanization

Sand, Steel, and Cement: The Annual Production of the World’s Building Blocks

Humanity produces a staggering amount of sand, steel, and cement every year to build the cities and spaces we live in.

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Sand steel cement production in 2020

Essential Materials for City Construction

From the buildings around us to the sidewalks we walk on, sand, steel, and cement are an important foundation for all urbanization. Every year, the world produces an immense amount of all three materials in order to supply the continuous construction of human-built environments around the world.

Using data from the U.S. Geological Survey, this visualization shows the steel, sand, and cement produced in 2020, to help put in perspective the amount of raw materials we produce and ultimately consume every year.

The Concrete Facts of Cement

Cement is the indispensable glue that binds together the materials that make up concrete highways, sidewalks, and buildings.

With concrete being the world’s most consumed material (beaten only by water), it’s no wonder that the world produced 4.1 billion tonnes of cement in 2020.

2020 Cement Production by Country

RankCountryCement Production (in million tonnes)
#1🇨🇳 China2,200
#2🇮🇳 India340
#3🇻🇳 Vietnam96
#4🇺🇸 United States90
#5🇮🇩 Indonesia73
#6🇹🇷 Turkey66
#7🇮🇷 Iran60
#8🇧🇷 Brazil57
#9🇷🇺 Russia56
#10🇯🇵 Japan53
#11🇪🇬 Egypt50
#12🇰🇷 South Korea50
Other countries890

Source: USGS

While cement-based concrete has a variety of benefits like being fire-proof, hydrographic, and frost-resistant, the IEA estimates that in 2019 the cement sector emitted 2.4 GtCO2, which accounted for 7% of global CO2 emissions. The production of concrete also requires high amounts of water, with calculations from 2012 finding that the concrete industry’s water withdrawals made up 9% of all industry water withdrawals (1.7% of total global water withdrawal).

To combat high carbon emissions and water consumption in concrete production, Swedish power company Vattenfall has developed a concrete mix which reduces the amount of cement needed, and as a result cuts down CO2 emissions by around 25%. Shifting the world’s concrete production to this new method could be the first step in greatly reducing cement and concrete’s impact on the environment.

Steel Recyclability Steals the Show

While cement is the most commonly used material in the world, steel is the most commonly used metal. With 1.8 billion tonnes produced last year, steel fulfills a variety of structural and construction needs, along with being an essential material for the production of vehicles, mechanical equipment, and domestic appliances.

One of steel’s greatest strengths is its ability to be infinitely recycled, making it the most recycled material in the world with new steel products containing an average of 30% recycled steel. While the world produced 1.8 billion tonnes of steel in 2020, since 1900 the steel industry has recycled over 25 billion tonnes of steel scrap, reducing iron ore and coal consumption by 35 billion and 18 billion tonnes respectively.

Global Steel Recovery Rates by Sector

SectorSteel Recovery Rate
Automotive90%
Machinery90%
Construction85%
Electrical and domestic appliances50%

Source: World Steel Association

The steel industry is also highly aware of reducing its environmental impact, with steel plants reusing the heat and electricity from process gases to provide between 60-100% of the plant’s electricity requirements. Along with this, ~90% of water used by the steel industry is returned to the source after being cleaned and cooled.

Yet steel production still emits around two tonnes of CO2 for every tonne of steel produced, largely due to the majority of the world’s steel production taking place in China’s coal-reliant plants. However, fossil-free steel is on the horizon, with carmaker Volvo partnering with the Swedish steelmakers SSAB to explore the development of fossil-free steel for the automotive industry.

More than Beaches

Completing the trio of essential city-building materials is industrial sand and gravel, with 265 million tonnes of the material produced in 2020. Primarily composed of quartz, feldspar, and other minerals and rock fragments, industrial sand and gravel is also called silica sand or quartz sand.

“It’s actually the most important solid substance in the world because without sand, we have no modern civilization.”
Vince Beiser

While steel and cement are opaquely visible in their end products in our cities, industrial sand and gravel primarily makes up the transparent glass walls and windows of our world. It also serves essential functions as foundry sand, forming molds and patterns for various metal castings.

Just like steel and cement, industrial sand and gravel is an essential building block of the cities we live in. As the world continues its shift towards reducing carbon emissions, it is clear that these essential materials cannot be replaced, and rather must be improved upon.

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