October 24 Prudent Bear.com– The Asian Wall Street Journal (Peter Wonacott): “From steak to iron ore to cotton to diamonds, China’s rising urban incomes and changing consumer tastes are reshaping the world’s commodity markets. The country’s emergence as a major importer of raw materials is driving global prices higher and catching some suppliers flat-footed… ‘China has sucked the cupboard bare of raw materials,’ says Jim Lennon, executive director of commodities research at Macquarie Bank Ltd…. And because of its fast growth, Mr. Lennon cautions, China ‘is starting to place severe strains on the global raw-materials supply chain.’ Already, prices of many natural resources and metals are surging. In the past year and a half, the cost of alumina, used to make aluminum, and nickel, which is used to make standard steel, has doubled, according to metals traders and analysts. World-wide metal inventories are at their lowest level ever, because big metal suppliers were reducing their capacity due to the economic slowdown in the U.S., Japan and Europe. But now, these companies are rushing to fill China’s voracious needs. Global shipping-freight rates have skyrocketed in response to Chinese demand. China’s auto and construction craze is underpinning the voracious global metals buying. Aside from iron ore, the country is so starved for copper that Chinese companies are importing French francs and melting them down, according to a Beijing official…”
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