FMG Profitability when IO at $50-60USD?, page-78

I very rarely post on here these days as the conversation seems to go around in silly circles.

But the main concern is being focused on China's production of steel and the consumption of it.

So lets take the worse case example of such a situation. I decided to do some digging online and found Japan's steel consumption in 1991 (crude steel) and the steel consumption for the last 6 to 8 years. We all know how hard the Japanese economy suffered from 1992 and afterwards so they are a good example to use.







With a a bit of simple calculations we can see Japan consumed around 115 million tonnes of crude steel in 1991. Compare this with pre covid numbers of aound 100 to 112 million tonnes shows that the reduction was not on a massive scale.

Empty apartments. Many are in undesirable locations (ghost towns). Where as say in Shenzhen (where I currently reside) demand is still high. Also the fact the state has more control on the economy means the government has more ability to stimulate consumption and will do when any reductions threaten the overal economy.

Then another consideration is India which is on the cusp of becoming a major importer of iron ore over this decade. Indian iron ore production is not going to be increasing at all over the next decade.





Of course estimations are just estimations. But the 4 to 5 % annual steel consumption growth over the past 5 to 10 years is a good marker to use. Even with that if China holds at current levels or lowers production by a small amount the overal demand is still going to be growing by around 100 to 200 millions tonnes atleast of crude steel.