SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: MulhollandDrive who wrote (3166)12/12/2003 8:59:36 AM
From: russwinter  Read Replies (2) of 110194
 
<raising rates in the US will have no effect on a demand driven price spike in commodities in china.>

I don't quite agree, but certainly China raising rates in China, could have an impact. From CI on Chinese inventory builds:

"It's been discussed in various darker corners on the Street lately that Chinese companies have been stockpiling commodities. Part of the rationale behind the PBOC's (People's Bank of China) recent increasing of banking system reserve requirements was to slow Chinese borrowing that at least in part has been financing what is essentially commodities speculation in corporate inventories. Thanks to the wonderful folks at International Strategy and Investment, we have the following numbers for your perusal":



China Inventories By Component Classification
Yr/Yr Rate of Change (October)



Tech, Machinery, & Transport Equip.
20.3%

Plastics
17.9

Smelting Metals
14.5

Pharmeceuticals
13.0

Tobacco, Timber, Power Products, Furniture,
11.8

Paper
10.1

Chemical and Petro Products
9.4

Rubber & Chemical Fibers
3.7

Food/Beverage
3.5

Mining
3.0

Apparel
2.9

TOTAL
12.4




The chart and numbers tell us that China has been a big importer of commodity products, a good portion of which have found their way into inventories. No massive revelation on our part by any means. But what is important is that if the Chinese economy slows in any way, or curtailment of borrowing becomes significant, commodity prices are at risk short term. Especially after the run up they have had in terms of both price and magnitude of accumulation in Asia.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News