shanghai listing eyed, page-12

Yes..... I saw that announcement of iron ore imports in China this afternoon before I locked in my post. Put it this way...... I try to be proactive and look out at least 6 months.

This reaction in the iron ore imports are due to the lagged nature of the huge fiscal stimulus that was passed through in China (Dec '08).

Let's make a bet on where iron ore prices will be in the second half of 2009. I say we will see the short term peak in iron ore prices right about now (i.e. around May to June). Look at the steel supplies for a sign of real demand. There is an oversupply in the global market. The auto and electronics industries are huge users of steel (i.e. stainless steel etc.) Their capacity cuts in some instances have been permanent, so any hope that activity will recover to pre bust levels are unlikely.

Added to that, we have Chinese steel mills busting capacity to churn out the metal in the hope that stimulus packages will kick start the next round of buying. That has not eventuated yet.

Lots of commodities are being stockpiled in China right now, not to be used for current consumption, but to act as a buffer for future shortfalls.

This is my view. People may disagree. Anyway, Happy investing.