Blog > Gold and Resources > Blog article: China Slides & Commodity Prices Dive
 | Email This Article Email This Article  | 

China Slides & Commodity Prices Dive

Posted July 28, 2008

“About half of the commodities used in China end up one way or another in an export of some kind. So, as we stop splurging on Chinese-made furniture, TVs and shoes, clearly China-related commodities demand will soften.” — Eoin Gleeson

by Eoin Gleeson

Baltimore — (TFN):  “Hungry China will dig miners out of a hole,” said a headline in The Sunday Times this week. This may be true – just not quite yet.

Chinese demand has been the main driver behind the huge boom in commodity prices over the last few years, but with the headlong rush for growth in the east now fading as western economies slump, the big mining groups are facing the prospect of having to survive the next few years without ever-increasing demand from the country.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Three Recession-Buster Stocks to see you through the next 6 months:

This $5 company has a lock on the key technology in China – and could generate gains of over 1,000%… Insiders are loading up on this battered contrarian energy play that could go up as much as 75% by November… And his tiny biotech holds the secret to crucial early detection of a debilitating disease AND could triple in value by next year. Get our FREE special report…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Between 50% and 100% of the increase in demand for commodities over the past five years has come from China, according to David Roche of consultancy Independent Strategy.

But for all the copper, iron and steel that China has fed into its construction plans and the talk about its rising domestic consumption, the fact remains that the country’s demand for commodities has as much to do with what it exports as it has with what it builds and consumes at home:  About half of the commodities used in China end up one way or another in an export of some kind. So, as we stop splurging on Chinese-made furniture, TVs and shoes, clearly China-related commodities demand will soften. Read on to learn how low commodities could go.

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. You can pick your favorite reader. Or if you prefer, you can have the feed delivered to your email.


Related Articles


Posted by TFN-Gold · Filed Under Gold and Resources 

Comments

close Reblog this comment
Powered by Disqus · Learn more
blog comments powered by Disqus