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Quarter-End Insights

Basic Materials: China's Investment-Led Growth Model Has Run Its Course

We don't see the recent share price declines for metals and mining producers as a buying opportunity on average.

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  • Despite significant share price declines for metals and mining producers, we believe real value remains relatively scarce, with Vale a notable exception.
  • Global oversupply continues to weigh on the steel market, and material improvement looks to be several years away.
  • Since it looks increasingly likely that the Eastern European potash cartel will reform, we've raised our long-term potash price forecast and fair value estimates for potash producers in our coverage universe.

Jeffrey Stafford does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.