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China Steel Demand Falls.; First time in 14 years.
Topic Started: 26 Sep 2014, 03:26 PM (2,522 Views)
Perthite
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http://www.watoday.com.au/business/mining-and-resources/china-steel-demand-shrinks-for-first-time-in-14-years-as-slowdown-stings-20140926-10mb43.html

If this is a peak it is at the worst possible time.
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newjez
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Perthite
26 Sep 2014, 03:26 PM
It must have been happening for a while. No smoke without fire. This has got to start hurting.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Perthite
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I think we are going to see some staggering falls in export values.

Forecasters will be lambasted.
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goldbug
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Looks more and more like were heading into a global depression every week now. Sure as hell glad I don't have any debt, debt is disastrous in a depression.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Massive
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Perthite
26 Sep 2014, 03:26 PM
The problem with what these miners dont understand ...
Quote:
 
But top global miners like Vale and Rio Tinto , which have invested billions of dollars to ramp up output to sell more iron ore to China, are still convinced that Chinese demand has yet to peak with an urbanisation drive there expected to last at least another decade


is that China market has changed... labor costs are rapidly increasing, financing is getting tighter and tighter, competition is higher and developers need to build something to dissuade wealthy / middle-class chinese from sending their money off shore - so the push for quantity is now easing, and the rise of large scale carefully thought out efficient strategies are starting to become more common.

From what ive witnessed ( and had to suffer through) in the last 18 months or so the whole construction sector is being pushed in a new direction - and it will be for the better... The design industry has complained of very few projects all year - and with the basic fast timeframe of 10-18 months for most projects to get to construction phase this will now start being witnessed in falling construction starts over the next year.

Once it all kicks back in gear, it simply wont be the same amount of quantity or rate of construction ( or same growth ) thrown at residential units .. china economy will be robust and the projects and I believe opportunities will be great - but the mass panic to build apartmtent towers all over has subsided - for now..

expect to see quality services - such as hospitals, schools, etc start coming online, and lots of refurbishment projects on shitboxes and empty shells rushed up in the last 10 years - all which will require less steel compared to dumping 30 apartment towers on a site.

This is pretty much sums up my view right now:
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"This reinforces our view that there will be a multi-year downtrend in demand for iron ore, and there's no hope for a recovery in prices to anywhere near $US100/tonne," he added.

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Ex BP Golly
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goldbug
26 Sep 2014, 04:58 PM
Looks more and more like were heading into a global depression every week now. Sure as hell glad I don't have any debt, debt is disastrous in a depression.
+1

Just picked up my last 4 title deeds from the bank.
Had left them there with $1000 to pay off toying with the "equity mate" style of thinking.

But then reflected upon all the institutional forgery and criminality that occured in America when they went pear shaped and realised its much better to hold your own docs.

Ive got a little consortium of like minded folk ready to pick up.

We were bouncing around ideas, and one reckons picking up things like espresso machine asnd coffee grinders is a goer.

With a cafe on every corner plus, that is one sector that will be smashed.

Store them until the good time roll around again.
Next to no costs, presently expensive though small, store well with a little vaso on seals etc.

Might even pick up coffee roasters. They are all over the place and cost a fortune.

plenty of options like that around.
Just have to diversify the lollies you want to pick up.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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miw
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Massive
26 Sep 2014, 05:50 PM
is that China market has changed... labor costs are rapidly increasing, financing is getting tighter and tighter, competition is higher and developers need to build something to dissuade wealthy / middle-class chinese from sending their money off shore - so the push for quantity is now easing, and the rise of large scale carefully thought out efficient strategies are starting to become more common.

From what ive witnessed ( and had to suffer through) in the last 18 months or so the whole construction sector is being pushed in a new direction - and it will be for the better... The design industry has complained of very few projects all year - and with the basic fast timeframe of 10-18 months for most projects to get to construction phase this will now start being witnessed in falling construction starts over the next year.

Once it all kicks back in gear, it simply wont be the same amount of quantity or rate of construction ( or same growth ) thrown at residential units .. china economy will be robust and the projects and I believe opportunities will be great - but the mass panic to build apartmtent towers all over has subsided - for now..

expect to see quality services - such as hospitals, schools, etc start coming online, and lots of refurbishment projects on shitboxes and empty shells rushed up in the last 10 years - all which will require less steel compared to dumping 30 apartment towers on a site.

This is pretty much sums up my view right now:

I think you've nailed it for the private sector. BTW a friend of mine runs a China Fund which focuses on PPP type stuff, and she says the govt is spending squillions on healthcare at the moment - but almost none of it will involve bricks and mortar - i.e. it is all about raising quality just as you are suggesting.

But there is a whole section of residential construction that is off the radar for stats (and probably architects as well) and that is the whole "economic housing" thing. My contacts tell me it is huge but it would seem that, at least so far, it is not huge enough to keep steel demand growing.

But could it be a huge headfake? China's done it before to try to bring down import costs. If it is, then it is at huge cost to its local producers and builders.

I'm also seeing rumours of a bit of a struggle at the top. There is one camp that wants to go back to do a big stimulus and another group that want to hold the line with current course and speed. If the head of the PBOC gets replaced in the next month then that will suggest the stimulus guys are winning.

I hope they hold the line because even if it is not good for Aussie steel producers it is the right thing for China.
Edited by miw, 26 Sep 2014, 06:24 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Massive
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miw
26 Sep 2014, 06:16 PM
I hope they hold the line because even if it is not good for Aussie steel producers it is the right thing for China.
if they hold the line, i can see major cities like shanghai and beijing being far more livable than most western cities..

they already are bridging the gap in many respects - quality of places to go in shanghai is on an exponential rise - but with better health and schooling along with cleaner air etc the place will be fantastic...
Edited by Massive, 26 Sep 2014, 06:37 PM.
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b_b
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Perthite
26 Sep 2014, 04:38 PM
I think we are going to see some staggering falls in export values.

Forecasters will be lambasted.
Bad news is you are a shareholder of an iron ore miner (foreign instos) or one of the very very few employed in iron ore production.

Pretty meaningless for everyone else.
(S – I) + (T - G) + (M - X) = 0
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peter fraser
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b_b
26 Sep 2014, 06:45 PM
Bad news is you are a shareholder of an iron ore miner (foreign instos) or one of the very very few employed in iron ore production.

Pretty meaningless for everyone else.
That can't be right MB have been telling us it will be a disaster for Australia.
Any expressed market opinion is my own and is not to be taken as financial advice
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