July 08, 2006

July 8, 2006: Warning: Bust!

Bust could be worst since end of Second World War -- Economists warn of onslaught of Chinese production John Greenwood, Financial Post, Published: Friday, July 07, 2006
www.canada.com/nationalpost/financialpost/
story.html?id=a45847b2-c908-4381-ac84-5e3c7b803530

The Canadian steel industry is facing a bust cycle potentially more devastating than anything seen since the end of the Second World War because of an expected onslaught of Chinese steel, industry watchers warn.

[....] Steel is already landing in North America at prices "significantly" below the cost of raw materials needed to make it, said Jayson Myers, chief economist of the Canadian Manufacturers and Exporters Association. "There's so much Chinese capacity coming on stream and that's already a problem for the whole of North America."

The crux of the problem is that even though China makes more steel than it needs, it's still building new foundries.
Mr. Hall said Chinese capacity has grown by about 22% annually for the past five years, for a doubling of output in just five years. "Those are staggering numbers," he said. "And this year isn't any different -- they're on track to grow another 22%."

Analysts worry that much of China's excess steel can now be channeled into manufactured products that can find their way around Canadian anti-dumping duties and onto the market, potentially causing serious damage to the Canadian economy.


Check further into Xstrata, Falconbridge, INCO, Arcelor, etc. ... and more on the push by the Chinese to gather up the world's metals, to corner the market on scrap metals (and more that I have forgotten). Note also, the increased theft of copper ... a Nova Scotia story lately ... but it is happening everywhere. Now, who would be doing that? Who would be stealing and selling it and to whom? To where?

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