There may be other reasons for the rise that don't always get published. For example, over on the GRR threads, post number 8507440 from Liaojining says that China has just increased the number of vehicles that can be registered - it is a good read & helps me understand how China has great capacity to turn on investment.
On the same string, Rocket973 posts:
FAIRFAX - Morning View – Friday 07.09.12
China – economic planners announce $127bn of new urban rail transit and intercity rail projects.
The figure rises to $157bn including further infrastructure projects
•The Chinese government has also approved the construction of 2,018km of roads, the second major infrastructure announcement this week. This spending is expected to run from H2 2012 to 2018.
•Chinese Officials have approved in the last few days, 25 urban rail projects, 13 highways, 7 waterway projects and nine waste water treatments plants.
•The approval of the projects does not come with immediate funding and local banks have become more cautious on increasing credit risk associated with infrastructure projects.
•China is now seen raising funds using asset securitisation indicating that it is keen to continue investment.
•The National Development and Reform Commission has accelerated the announcement of projects since April,
•Theory is that Chinese economic activity has slowed ahead of the Communist party reshuffle with project announcements being delayed for final decision and announcement by the incoming leadership.
•The 25 rail project announced will take 3-8 years to complete and should enable workers in second-tier cities to commute in relative comfort. That’s if you think commuter trains are comfortable these days.
•Commuter rail projects will require extensive electrification. The trains use tonnes of copper cabling as each rail car axle is driven by its own controlled motor. The over head electrical cables or third rail depending on which system use steel and aluminium. Connections between rails and overhead lines are generally copper cables with steel protection.
•The expansion in commuter rail systems in China will also require the development of new electrical generation capacity requiring further connection through overhead ‘high-tension’ lines (aluminium) and power generation equipment which use tens of tonnes of copper in their windings and connection to transformers.
•In short these systems are highly metal intensive requiring many thousands of tonnes of steel, copper and aluminium + stainless steel (nickel & ferrochrome) fittings for trains and stations etc….
MCR Price at posting:
87.0¢ Sentiment: Hold Disclosure: Held
