Tuesday, November 04, 2008

More On China´s Slowdown......

Havn´t heard the word decoupling for a long long time....... It will be interesting what will happen to the population will react when the slowdown intensifies ( i think it will ).... This can easily spread into trouble for the communist party..... UPDATE via Naked Capitalism Roubini Foresees Chinese Hard Landing

Könnt Ihr Euch noch an die schöne These erinnern das China sich vom Rest der Welt abkoppeln kann..... Denke es wird sehr interessant zu beobachten wie die Bevölkerung auf einen dramatische Verlangsamung des Wachstums reagieren wird.....Bin mir ziemlich sicher das die schon jetzt vorhandene Unzufriedenheit leicht explodieren könnte. In der Verlangsamung liegt also ein gewaltiges Maß an politischem Sprengstoff.... Bleibt zu hoffen das die kommunistische Partei Ihre bereits jetzt höchst fragwürdige Politik nicht noch weiter "überzieht"....... Passend hierzu via Naked Capitalism Roubini Foresees Chinese Hard Landing

WSJ Mount Gibson Iron Ltd. said three Chinese customers have defaulted on long-term iron-ore purchase agreements, but that two other buyers have agreed to step in -- albeit paying a much lower price. In addition, the new buyers, which are already shareholders, agreed to underwrite a capital-raising effort and they could end up owning as much as 40% in the Australian miner.

Mount Gibson said the new sales agreements were struck at a much lower price and its profits would take a "material" hit in the financial year that ends June 30, 2009.

The Australian company's willingness to accept a much lower price for its ore, at least over the next couple of months, shows how quickly a global slowdown has pegged back China's economy, forcing Chinese steel mills to slow production and pushing down iron-ore prices.

UPDATE via Bloomberg Scrap-Steel Buyers Cancel Purchases as Prices Tumble

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Anonymous Andrew said...

I would not read too much into chinese defaults on iron ore. In the last 6 months i recall some unbelievably large increases in prices for some of these new contracts between Oz and China. Now that reality has returned to these markets its not unnatural for users to want to 'renegotiate' the deals.

7:01 PM  
Blogger jmf said...

Moin Andrew,

i agree.

News like the 35% output cut from the biggest steel maker Mittal are showing that the market has already shifted to a buyers market.....

Quite a U-Turn within one quarter....

9:13 PM  

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