China Just Hooked Up The New Silk Road All The Way To London

China Just Hooked Up The New Silk Road All The Way To London

Critical news for developers of bulk commodities across Europe and Asia this week.

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China and London are now connected by rail.

The China Railway Corporation said this week it has launched the first-ever direct rail freight service between China and London. With a train leaving Yiwu station to embark on an 18-day, 7,400-mile journey that will cover the entire breadth of the Asian and European continents.

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As the map below shows, Yiwu station is located in Zhejiang Province, on the East China Sea immediately south of the city of Shanghai. Making this rail journey truly a coast-to-coast crossing.

China’s new rail line service departs from Zhejiang on the East China Sea, bound for London

This big rail hook-up is part of China’s emerging New Silk Road strategy — aimed at increasing trade across Asia and into Europe. And the new route is helping connect a large number of countries along that corridor, passing through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France before reaching the U.K.

The inaugural voyage of this “Silk train” is carrying mostly ceremonial goods like clothes, bags and other household items. But the establishment of this route raises some big possibilities down the road for moving mineral and energy commodities.

Bulk commodities like coal, iron ore, and bauxite would certainly be candidates for utilizing the China-London rail corridor. With countries like Russia and Poland having plenty of these resources.

A nation like Kazakhstan also holds substantial deposits of chromite — which could also be moved to new markets using this new transport. And Belarus hosts big potash potential that could find buyers in Europe or China.

Perhaps the biggest beneficiary of the rail line could be copper. Which is produced throughout Kazakhstan, Russia and Poland — and could be moved as concentrate to smelters across Europe and Asia.

That’s exactly the kind of unlocking of mineral resources that China is looking for. Watch for announcements on who signs up to use the new China-London route, and what goods will be making the journey.

Here’s to a train not in vain,

Dave Forest

Article by Pierce Points

Updated on

Dave Forest writes Pierce Points Free Daily E-Letter, an advisory on mining and energy read every day by BP, Rio Tinto, JPMorgan, BNP Paribas, Repsol, GDF Suez, GE, Platts, Warburg Pincus, and the UN. Sign up for free at Mr. Forest has funded and managed over $80 million in global exploration and development in natural resources, and continues to design and develop projects globally. He is a professional geologist.
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