China’s domestic growth, China’s mining industry, energy resource development, freight rates, iron ore, mining activity, shipping costs, steel consumption
China’s stature as an international powerhouse can be felt in economic markets across the globe. China’s domestic growth and increasing consumption is driving commodity prices, shipping costs, mining activity, steel consumption, and energy resource development. Most influenced are dry bulk shipping prices, especially iron ore and coal, central to China’s steel production.
Mid-December market analyses of several sectors show the degree of China’s influence. Prices for iron ore entering China, for instance, were holding steady at $140 per ton, exceeding even the expectations of the world’s leading mining companies who with each passing year are exporting more of their raw materials to China: Vale, Rio and BHP. The high prices were felt across China’s mining industry, some more deeply than others as they faced production costs of as much as $170 per ton. Over the first 11 months of 2013, China’s cumulative iron ore imports increased by 11%. September and November were record months, with 74.6 metric tons and 77.8 metric tons respectively, a significant jump from October’s total imports of 67.8 metric tons. Forecasters expect that a total of 801 metric tons will have reached China’s ports by the end of 2013, representing 67% of the 1,197 metric tons forecasted to reach ports in the rest of the world. China’s population growth combined with a healthy economy and busy construction industry are pushing up her per capital consumption of steel. As a consequence, the BCI 4TC index rose from a daily average of $6,136 in the first half of 2013 to $22,016 in the second half (as of 13 December).
But China is also facing some challenges. Its domestically produced raw material is inferior to what is available from outside markets, pushing up the quantities of iron ore and coal imports, and along with it freight rates. Furthermore, environmentalists and residents have been agitating about the low ferrous and high sulfur content of domestic coal which is increasing the amount of airborne pollutants. In response, the government initiated new restrictions on miners, designed to improve quality, reduce pollution and stabilize capacity and prices. Mining near to tourist or residential neighborhoods will be banned. Installation of dust abatement technologies will be required at all mines, along with penalties to encourage production of cleaner coal. The government will phase out any mine not producing at least 90,000 tons per year, and no new permits will be permitted to any mine not capable of producing at least 300,000 tons per year. Policymakers are following precedent set in 2008 during the international economic meltdown, when strict regulations were imposed on Shanxi Province mines, which, at the time, were supplying at least 40% of the nation’s coking coal. The trial regulations resulted in better prices and improved quality. The new regulations also address inferior coal product, causing increased imports from more superior coal mines abroad, such as in Australia, Mozambique and South Africa. This, of course, benefits the economic condition of the exporting countries. Australia, in particular, is looking forward to increasing its exports to China, forecasting that China’s imports of thermal coal will grow by 17% over the next five years.
China is powerful. They are very smart.
Riyasat Zisan said:
China is already the largest economy in the world after the United State. China’s economy is highly integrated into the global market. thanks for such informative article.
Elena Gomez said:
I totally agree with your speech. No doubt, China is dominating the world economy.
Seph Gold said:
If the U.S. ever went back to more protectionist tariff policies this would probably not be the case. But that ship sailed a long time ago I guess.
lance Gane said:
China is in crisis and there is no way out of it within the confines of capitalism.
Powerhouse would definitely be the word to describe china’s current economic situation. I was unaware however of all the problems they are plagued with as well. Very in-depth.
drew moore said:
completely agree, china are on top!
China’s economy is a facade. Their GDP is second to the US but they have over 1.3 billion people. Their housing market is a flop. I remember watching Vice and they were talking about buildings and cities that weren’t even populated.
On top of that, their idea of capitalism is the best example to use when explaining class-ism at it’s worse. Place all the poor farmers in ghettos and build land over their homes for the rich who don’t exist. China’s rich is so bored they buy billboards just to find mates.
Austin Kin said:
China seems to be dominating the market because of their outstanding economy and massive supply of jobs and viable resources. China’s mining industry seems to be huge also which obviously puts them on top in the mining industry.
China will overtake the US the be the biggest economy. The US can’t compete with the low cost manufacturing.
James Beeching said:
I believe China will become a serious threat to American and European economies due to raw manpower and industry
China without any doubt will lead for a very long time mainly because of their economic ambitions.
Rachel Lopez said:
China is already more powerful then US, they are not only prducing everything to the world on the cheapest price, but they are already everywhere in person, there is no large or smaller city in the world, where chinese people wouldn’t lead the markets with their cheap stores.
Glenda M Thompson said:
Yes, China has come a long way in social welfare.
China is in a very dire predicament. On the one hand they have complete control over the global currency direction, but on the other, they are sitting on top of a hefty amount of U.S debt. If they can outsource this debt to other countries, they’ll be in prime shape.
Brandon A said:
China seem to have it all figured out. No surprise that they continue to dominate, econonomically speaking. North America could learn a thing or two from the way China operate.
As far as the issues they’re facing that you outlined above, I believe they’ll find a way to power through and keep the ball rolling. They’re an educated superpower in the world as we know it with the capability to clear nearly any hurdle.
I Love your work. The Chinese people are very smart. And they work together. That is why they are dominating no doubt. Unity is strength.
Even though China continues to dominate the world economy. I still have grave worries that we are not being told the whole story and that their growth is far less than we are being told.publicly
Charles McKinney said:
I order from Amazon.com a lot and am surprised at how cheap the rates are for packages. Now if we can just get the time in transit down to a minimal.
China has a booming economy but is blighted by The european unions insistance that the UK does not do direct business with them.
Rex Smith said:
Iron ore, coal and petroleum are vital for growth, more mining should be carried out inside the country for iron ore and petroleum. China is set to be a superpower and will dominate the world economy in the future years to come.
China has indeed come a long way, and have always had the ability to dominate the market, due to the size of the nation, but certainly have made a name for themselves in the last decades
Bill Adder said:
Pollution is a big concern. I know some people who were visiting China recently and couldn’t believe the level of smog. I could see it hurting their tourist industry.