Running a semi-communist state is not an inexpensive venture. By its nature the state runs and provides for all. If that state decides it wants to modify its policy by a certain margin, the process begins to become more interesting. Overall, this indicates that money will flow past the “party-line” constructs so that the country might prosper. The question is, however, how and where does that money flow. Finding where that money is flowing is the trick to making a nice little profit.

China Armco Metals Inc., an importer of various metal products into China, sources metals and ores from global sources. Among the various metals imported are: iron ore, chrome ore, nickel ore, copper and scrap steel. One should not underestimate the value of the scrap steel component of the company’s work and the fact that it imports additional ore product. The company is based in San Mateo, Calif., USA.

Addressing this company’s work, one must recognize China’s desire to build out its infrastructure and thus its need for basic materials. China Armco is the facilitator in this regard. If the central government or appropriate company recognizes a need for copper, they simply call the company and tell them they need copper. The company looks around the globe for the best price and a deal is done. In a general sense, this is the way that this process works within the Chinese system. The deals are consummated with steel mills and other refining type operations but the concept of central planning is the driver with Armco making the first step in the process happen.

In this regard, the company has just completed a $13.2 million iron ore contract with hopes to move further into the steel sector. A solid start with iron ore will dove-tail nicely with the scrap steel business that it engages in (and may suggest a look at investments in past posts where bulk carriers in the region are concerned.) Regardless of the structure of the Chinese system, they have the dollars to spend and are spending them. China Armco Metals is one of the lead procurement arms as far as this goes and should have little issue as the country builds itself out. Overall, it may be worth a look along with allied areas such as shipping, mining, and foundry interests.