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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: DewDiligence_on_SI who wrote (187503)	12/30/2014 3:06:01 PM
From: Biomaven	Read Replies (2) \| Respond to of 206093

>>China’s year-over-year growth in consumption of many commodities remains immense in absolute terms. But China's growth is clearly moderating rapidly. The second derivative is clearly negative. Let's take a concrete example - say steel. For decades now, capacity has exceeded consumption. The only saving grace has been China's growth - I believe China now consumes nearly half of the world's steel production. With that rate of consumption growth now sharply dropping, it is pretty clear that there will be excess world capacity for years to come. That is a recipe for weak prices, particularly as some of the excess capacity is locked in by political considerations. This report is worth reading on the subject: ey.com Obviously each commodity is a bit different, but I think steel is a representative example. Peter