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Puda Coal, Inc. (PUDA) Takes Advantage of Chinese Stimulus Money

Some sectors of manufacturing get a bad reputation for their products. One aspect to consider, however, is that there are often many ways to use these products to bring benefit to people and their economy. Coal is one such product. It is a dirty fuel, but it is needed. Consider that it acts to aid in the manufacture of other products to perform needed functions.

Puda Coal Inc. works in the People’s Republic of China to produce coking coal for the manufacture of steel products and coke as a general product. The company currently has a washing capacity for its coke product of 3.5 million metric tons and helps to supply a majority of coke to the domestic infrastructure program.

Understanding the central government of China is never a certainty. It is, however, fair to say that action and general economic principles are “in-play” at the moment. This might mean that the central government has quite a bit of capital, which it has been using to generate export income, and needs to redirect it. Considering basic economic theory, export cannot be a sole pillar of an economy as it relies on outside economies. What is the alternative? Investment in the country’s internal infrastructure, which is what China and Puda Coal appear to be doing.

Regardless of how one might address this issue, steel is going to be a very large part of the equation. Understanding the steel manufacturing process is not necessarily needed, other than that there is a real need for a product called coked steel. Puda Coal Inc. is the leading producer of this type of product and likely the beneficiary of the central government’s infrastructure program. In a general sense, the company is already on a solid footing and appears to have the contacts within the central government to continue its progress.

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