China Commodities
Marc Faber of the famous or infamous “Gloom, Boom & Doom Report" says the demand for commodities in China will decrease significantly in 2010 as the construction boom largely fueled by the Chinese stimulus isn't sustainable.
Chinese authorities concur with this with some raw materials, stating copper imports for 2010 should return to 2008 levels after so much construction was initiated but which has largely resulted in a ton of empty buildings all over China.
Two commodities where this probably won't be true will be with iron ore and molybdenum, which are used in steel, which looks like it will be in high demand in China for the next year at least.
This is because a lot of the steel will eventually be exported and isn't reliant upon the domestic Chinese market to sustain demand.
But for commodities related to domestic Chinese construction I believe Faber is right, and investors will need to take that into consideration for 2010.
China Commodities
1 comment:
If what you are saying is correct then there will be an impact on iron ore prices. Yes, some of the iron ore is used in exportable goods but a large portion of it is used in building constructions.
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