Today the world is watching the opening ceremony of the winter olympic games in Sochi. But the start of the games also mark the finishing of huge infrastructure investments.
What does that have to do with the metals industry? Well, a lot.
The investment sum for Sochi was quoted by the Russian deputy prime minister as the “most large-scale investment project” of the country. Included in that are new railway tracks, a new train station, huge stadiums and a number of new hotels, just to name a few. All of these buildings required steel and other metals such as copper, aluminum etc.
And most importantly, this is a demand that can be viewed as additional demand that comes on top of the usual need for metals from the automotive and construction industries across the globe.
Later in the year Brazil will be hosting the FIFA World Cup, the biggest sports event on a global scale. The construction and modernization of big soccer stadiums is still going on. And again, a huge demand for metals has come along with that.
Now, one could argue that those investments in Brazil and Russia are reducing partially the funds available for other infrastructure investments in the respective country. But still, these events are the drivers for investments that would not have been made without them. In other words, they contribute to an increased demand in metals.
While the metals industry is still going through challenging times, these kind of mega-events are good news for the industry. Not only for metals but for a number of other industries like building materials as well.