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Iron Ore Jumps Most on Record as Market Goes "Berserk"
Iron ore soared the most ever after Chinese policy makers signaled their willingness to buttress economic growth, boosting the outlook for steel consumption in the top user and igniting speculation that some investors who’d bet against the market had been caught out.
“OVERSUPPLY is a global problem and a global problem requires collaborative efforts by all countries.” Those defiant words were uttered by Gao Hucheng, China’s minister of commerce, at a press conference held on February 23rd in Beijing. Mr Gao was responding to the worldwide backlash against the rising tide of Chinese industrial exports, by suggesting that everyone is to blame.
I was just scanning the weekend edition of the WSJ, and there's an extensive article that touches on this. A short excerpt/quote:
A recent report by the European Union Chamber of Commerce in China says that China's steel capacity is more than double the world's next four biggest producers combined- Japan, India, the U.S. and Russia- and has become "completely untethered from reality". It is a similar story in the cement industry. From 2011 to 2012 China produced as much cement as the U.S. did in the entire 20th century, the report notes.
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“OVERSUPPLY is a global problem and a global problem requires collaborative efforts by all countries.” Those defiant words were uttered by Gao Hucheng, China’s minister of commerce, at a press conference held on February 23rd in Beijing. Mr Gao was responding to the worldwide backlash against the rising tide of Chinese industrial exports, by suggesting that everyone is to blame.
From The Economist, Feb 27th, 2016
Those big piles of unused raw materials aren't going anywhere soon.
A recent report by the European Union Chamber of Commerce in China says that China's steel capacity is more than double the world's next four biggest producers combined- Japan, India, the U.S. and Russia- and has become "completely untethered from reality". It is a similar story in the cement industry. From 2011 to 2012 China produced as much cement as the U.S. did in the entire 20th century, the report notes.