-
The impact of the GFC on global minerals trade
(the critical themes & drivers affecting the GLOBAL
economy)
Drivers of Global Tradeeven in a GFC
Melinda Moore CleanUp Commodities 17 November 2011
-
Demand - who wants what?
World Steel
-
Demand - who wants what?
Push-Pull: Developed vs Developing
o Growth or Contraction
o Structural vs Cyclical drivers
o Policy prescriptions / Fire-power
========> 2 tones / 2 speeds
2010 vs 2005 global steel incremental consumption delta (mt)
World Steel
4Q08 global growth blip
-
Supply who has what?
Domestic Short or Longs?
Operating Disruptions Weather
Mechanical failures
Labour disputes
Grade declines & mine depletions
Cost Curve Positioning CFR (transport), not FOB;
Total, not Cash cost
Investment Disruptions Macro conditions (risk-off)
Nationalistic fervour (ownership)
Political climate (taxes)
Approvals processes (environment)
Equipment / Labour shortages
Pricing conflicts
Bloomberg; Note: 1 Jan 08=100
-
Price - Negotiating a worthy outcome
Arbitrage beneficiaries
Affordability not limitless
beware Commodity Strangulation
-140
-120
-100
-80
-60
-40
-20
0
20
40
60
2005 2006 2007 2008 2009 2010 2011E
China Thermal Coal Net trade
Turnaround from
Surplus to Deficit
0
50
100
150
200
250
Jan 08 Sep 08 May 09 Jan 10 Sep 10 May 11
Newcastle Thermal Coal (6700 Kcal) CFR price China domestic spot
price
Arbitrage turnaround
-
Indicators to Watch or Avoid
WATCH
Turkish Scrap price real economic activity
AVOID
Freight rates Baltic Dry Index
-
US and EU capacity recovery rates
-
Urbanisation Rate Comparisons
Urbanisation Rates
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Japan
S Korea
China
India
Vietnam
US
Japan S Korea China India Vietnam US
-
China vs ex-China growth patterns
-50
0
50
100
150
200
250
300
2010 2015 2020 2025 2030 2035 2040
world ex-China
-150
-100
-50
0
50
100
150
200
250
300
2010 2015 2020 2025 2030 2035 2040
China
