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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (15067)	11/7/2004 11:57:19 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

China: output may beat demand November 08, 2004 MINING companies will be running the slide rule back over their forecasts today after China warned its iron and steel production capacity may exceed demand as soon as 2007. "Product prices, scale of production and the level of investments are in a bubble stage," China's State Information Centre said. "There may even be an oversupply situation developing." The prediction could come as a shock for Australia's big resources exporters who have pegged strong growth forecasts on the assumption that China's hunger for iron ore would be insatiable for much longer. BHP has committed a further $US575 million ($770 million) to expanding its WA iron ore operations by 8 million tonnes from the 110 million tonnes it will shift this year. Rio Tinto will dig up 116 million tonnes of Pilbara dirt by late 2005 while Hope Downs and Andrew Forrest's Fortescue Metals are among a string of other companies that signed big contracts to supply China. Iron ore is at record prices and China is pivotal to these producers as it uses more steel than the US and Japan combined. The Chinese government has been trying to dampen investment in steel mills amid other measures to slow rampant economic growth and avoid a much-talked about "hard landing" for the world's boom economy. The government will also cut its spending next year, saying as the fiscal adjustments take hold oil consumption growth should slow to 6.7 per cent in 2005 from 20 per cent this year. theaustralian.news.com.au