Palm Beach, FL 12/12/11 (StreetBeat) -- www.InvestorIdeas.com, a global investor research portal for independent investors, distributes the following CFA commentary on China magnesium producer China Direct Industries Inc, (NASDAQ:CDII) and the key markets that drive the demand for magnesium. The report, Magnesium Demand- Indicators and Outlook, was issued by Patrick J. Murphy, Murphy Analytics LLC, a provider of sponsored research coverage on small cap stocks. Magnesium Demand – Indicators and Outlook
Headquartered in Deerfield Beach, Florida, China Direct Industries, Inc. (NASDAQ:CDII), sources, produces and distributes industrial products in China as well as the Americas. The Company operates in two business segments – the magnesium / basic materials segment and a consulting segment that provides a suite of services to companies operating primarily in China. These services include financing structures and arrangements, mergers, acquisitions and other business transactions, identifying potential areas of growth, translation services, managing and coordinating all necessary government approvals and licenses in the PRC, as well as marketing services, investor relations services, and coordination of the preparation of required SEC filings.
CDII’s magnesium / basic materials segment, with annual production capacity of 50,000 metric tons of pure magnesium ingots and 10,000 metric tons of magnesium powder, makes China Direct Industries Inc. one of the largest magnesium producers in the world. At nearly 80% of Q3 2011 revenue, the magnesium / basic materials segment is a critical driver of CDII’s success, with magnesium representing approximately 44% of total revenue and basic materials representing approximately 35% of total Q3 11 revenue.
While market fluctuations and global economic and fiscal challenges will always result in some degree of uncertainty in the short term, the outlook for the magnesium demand seems to be highly positive in the longer term as a result of growth that appears likely across the industries that utilize magnesium as a basic input. With a commanding share of market production, China Direct Industries (NASDAQ:CDII) may be of interest to those interested in investing in the long term prospects for magnesium.
Background – Magnesium Properties, Uses, Market
- Physical Properties[i]: Magnesium is the lightest and strongest of the structural metals - it is 33% lighter than aluminum, 60% lighter than titanium, 75% lighter than steel.
- Uses [ii]: Most pure metals, including magnesium, are too soft for structural use. However strength properties comparable to those of many aluminum alloys are obtained by alloying magnesium with other metals, and, in some cases, by heat treating or working. Magnesium is also used in desulfurization with other metals, specifically steel. According to estimates from the International Magnesium Association, the primary uses are:
o Alloying with aluminum - 40 - 45 percent
o As a structural metal - magnesium alloys - 33 - 35 percent
o Iron and steel processing - desulfurization - 13 percent
o Electrochemical and other
- The Market: China produces approximately 80% of the global magnesium market, which grew over 24% to 809,000 tons in 2010[iii].
Read the full article and bio for Patrick Murphy at Investorideas.com:
http://www.investorideas.com/CO/CDII/news/2011/12081.asp
China Direct Industries Inc, Inc. (NASDAQ:CDII), is a U.S. based company that sources, produces and distributes industrial commodities in China and the Americas and provides business and financial consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, China Direct Industries' unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets.http://www.cdii.net
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The author, Patrick Murphy, was compensated $550 by InvestorIdeas.com for writing this article. Murphy does not own shares of any of the companies mentioned in this article. Mr. Murphy’s research firm, Murphy Analytics, may be engaged for the provision of a research report on CDII in the future.
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