tastarga....., page-16

re: tastarga/meerkat - answer!!!! Great post Tibbs.

On the subject of Iron - from todays AFR ...

"China steels itself for iron shortage
Stephen Wyatt | Shanghai
2005/03/21

It's come to this: in a sure sign that we are in the midst of a resources boom, manhole covers are fast disappearing across China.

Over the past two months, more than 2000 cast-iron covers have been stolen from the streets and footpaths of Shanghai. During the year, 240,000 were stolen from the streets of Beijing.

The booming trade in stolen manhole covers accounts for cycle accidents, the smashed front-ends of cars and the sudden disappearance of the odd pedestrian, but also highlights the emerging and critical shortage of this key commodity as a result of China's industrial boom.

Beijing's utilities operators are now testing a new kind of manhole cover made of non-metal materials with no recycling value.

The world steel price recently traded at record levels. Although it has slipped back a little, it is still 50per cent above its previous high in the mid 1990s and, with the world hot rolled coil price just under $US600 a tonne, has almost tripled in the past three years.

The Chinese manhole thief is not benefiting to nearly the same extent as BHP Billiton and Rio Tinto. A 30-kilogram manhole cover sells for 20 yuan (about $3) at Shanghai and Beijing scrap metal dealers. Rio Tinto just won a 71.5per cent increase in iron-ore prices for 2005-06 shipments, and BHP Billiton is holding out for even more.

This commodity price boom is broadly based. The widely followed Reuters-CRB index of 17 US commodity futures markets traded up to its highest level for 24 years last week. Crude oil rallied past $US57 a barrel, its highest level ever; copper is near its 16-year high; gold, at $US440 per ounce, is just $US15 an ounce under its 16-year high; and coal and iron ore prices are at record levels.

There is a growing fear that funds engaged in heavy, speculative buying of commodities may result in a sudden price slump, but fundamentals remain supportive. Most analysts suspect any price fall will be well bid, and will amount to little more than a correction in a continuing bull market.

China, the major player in this resources boom, continues to enjoy strong economic growth and there are signs that this may even be accelerating, despite Beijing's efforts to slow investment and growth from last year's rate.

Chinese industrial output in January-February rose by a higher-than-expected 16.9per cent from a year earlier and exceeded the 14.4per cent year-on-year growth reported in December and 14.8per cent in November.

China's fixed-asset investment rose by 24.5per cent in January and February compared with the same period last year, well above the 16per cent median forecast of economists.

But China alone is not responsible for this resources boom. Strong growth in the United States and the rest of Asia, and renewed - albeit tepid - growth in Japan also underpins global raw material prices.

The latest lead economic indicators from the Organisation for Economic Co-operation and Development, which have proven to be accurate indicators of OECD industrial production growth, continue to show a modest improvement.

January was the third successive month in which the lead indicator increased after its rate of growth declined through most of last year.

Industrial production growth is a key driver of the demand for raw materials.

Recent data from Japan offered a pleasant surprise: gross domestic product growth in the fourth quarter last year was revised to 0.5per cent quarter-on-quarter (seasonally adjusted), up from the initial estimate of minus 1.2per cent.

The revision takes Japan out of its technical recession - two consecutive quarters of negative GDP growth - and has boosted confidence that the Japanese economy is recovering."