Replies to post #6796 on The Rising Influence of Rising Affluence

[DewDiligence]

More from the same author:

The process of modernization has historically been impervious to shocks, although there always are shocks. There will be a banking bust -- many banking busts -- before China finishes modernizing. There will be one or more real-estate crashes. I'm sure there will be social unrest. I'm sure there will be crass violations of human rights and property rights. Everybody has a reason to think China's model has to fail. And yet…, for the 10 years I've been writing China notes, GDP growth has averaged 9.5%. So, I stick to my guns: Modernization in China is inexorable.

[go seek]

Global Iron Ore Mining Industry Market Research Report from IBISWorld

FWIW... seems like there are as many different 'predictions' on IO prices as stars in the sky...

Tremendous spikes in the price of iron ore prior to and following the recession offset any declines that occurred over the past five years, enabling the industry to grow at a rapid pace; over the next five years, surging demand from emerging countries will keep prices for iron ore at their current highs, spurring mining companies to ramp up production to capitalize on growing revenue and profit opportunities.

For these reasons, industry research firm IBISWorld has added a report on the Global Iron Ore Mining industry to its growing industry report collection.

Los Angeles, CA (PRWEB) March 27, 2013
The Global Iron Ore Mining industry's financial performance has been highly volatile over the past five years. The industry weathered through triple-digit revenue spikes and double-digit declines. After two years of extraordinary growth in 2010 and, to a lesser extent, 2011, revenue contracted in 2012 due to plummeting prices of iron ore. However, according to IBISWorld industry analyst Agiimaa Kruchkin, “In 2013, industry performance is expected to recover on the back of rebounding iron ore prices.” Consequently, industry revenue is expected to grow 4.7% to total $264.3 billion over the year. Profit has been similarly unstable, though it has increased overall at an annualized rate of 5.5% to about 43.2% of revenue in 2013.

Despite a volatile performance, tremendous growth over the period has ultimately offset any declines, leading to estimated average annual revenue growth of 14.6% in the five years to 2013. Growth for the Global Iron Ore Mining industry has primarily occurred on the back of higher iron ore output and prices. Strong growth in large emerging nations, such as China and India, has driven the demand for iron ore and underpinned higher prices during most of the five-year period; as a result, industry revenue and profit have expanded rapidly. “The industry’s major players, such as Vale and Rio Tinto, have all benefited from these positive conditions, which have allow these companies to acquire several smaller companies over the period and increase market share,” says Kruchkin. Nonetheless, the industry retains its low-to-moderate market share concentration.

Total iron ore production worldwide is expected to reach about 2.87 billion metric tons in 2013 (compared with 2.10 billion metric tons in 2008). More than half of this total will be traded internationally. Trade occurs primarily between regions rather than within regions, although there is some intraregional trade in Europe and North America. The major importing regions are North Asia and Europe, while the major exporting regions are South America and Oceania. Following the recession, most iron ore supply contracts shifted from annual pricing (which has been the norm since the 1960s) to more flexible quarterly or even monthly pricing.

Industry performance is expected to continue improving over the five years to 2018, with revenue projected to rise strongly. The gain reflects ongoing global economic growth, increased steel output and rising iron ore production and prices. These factors are supported by strong demand for steel from emerging economies (e.g. China), as well as strengthening developed economies. Profit is expected to grow slightly slower than revenue, reflecting rising wages and higher material costs (especially of fuel). For more information, visit IBISWorld’s Global Iron Ore Mining industry report page.

http://news.yahoo.com/global-iron-ore-mining-industry-market-research-report-080618768.html;_ylt=A2KJ2PboB1ZRfCEAPf7_wgt.

[DewDiligence]

China's leaders reaffirmed their intention to turn urbanization into a powerful engine to drive growth and remake the economy, saying they would encourage rural residents to move to smaller cities, rather than Beijing, Shanghai and other megacities.

http://online.wsj.com/news/articles/SB10001424052702304202204579259221407331500

From an environmental standpoint, encouraging rural migrants to move to small and medium-sized cities—rather than Shanghai, Bejing, Guangzhou, or Wuhan—seems like a no-brainer.

Also see:

• #msg-86280699 for the impact of urban migration on GDP growth;

• #msg-70416781 for a related story on subsidized housing; and

• #msg-56438958 for a chart comparing China’s urbanization rate to that of other countries.

[DewDiligence]

China's government aims to deliver economic growth of about 7.5% this year, Premier Li Keqiang said in a report to China's legislature released on Wednesday. The target is unchanged from last year.

http://online.wsj.com/news/articles/SB10001424052702304360704579419792604179898

China’s 7.5% forecast for GDP growth in 2014 is the same as the IMF’s forecast (#msg-96219398). China’s official goal for the 2014 increase in CPI is 3.5%; the actual rise in 2013 was 2.6%. China’s official goal for 2014 growth in fixed-asset investment is 17.5%.

Related info in #msg-86280699 and #msg-95025658.

[DewDiligence]

China announces urban-migration plan:

http://www.nytimes.com/2014/03/18/world/asia/china-releases-plan-to-integrate-farmers-in-cities.html

The plan — the country’s first attempt at broadly coordinating one of the greatest migrations in history — foresees 100 million more people moving to China’s cities by 2020… Underpinning these projections would be government spending to build roads, railways, hospitals, schools and housing.

…The plan strongly emphasizes the improvement of quality of life for new city residents through increased government spending. It also calls for improvement in the quality of building construction…

…To make this possible, the government is promising huge infrastructure spending. Every city that exceeds 200,000 in population is to be linked by rail and expressways, while every city exceeding 500,000 is to have high-speed rail service.

The plan’s main goal is to have 60% of China’s population living in cities by 2020.

See #msg-86280699, #msg-86280731, #msg-70416781, and the chart in #msg-56438958 for related info.