November 6, 2010

Chinas Insatiable Thirst for Steel

By Planet Wealth

pSince gaining independence from Fantastic Britain in 1947, India has imposed various protectionist measures to insulate its populace from outside competition. And India is still mindful of shielding itself from what it sees as neo-colonial threats. Looming large among them, in Indiarsquo;s view, is China, with which itrsquo;s competing for increasingly scarce resources.nbsp;/p
pIndia is the worldrsquo;s third-largest iron ore exporter, and China is its chief customer. The country produced about 230 million metric tons of iron ore in fiscal 2009-10 and exported nearly half of that to China. Indian government officials, but, are increasingly worried that given Chinarsquo;s voracious appetite for iron ore, India wonrsquo;t have enough to meet its own steel millsrsquo; needs in just a few years./p
pTo meet its development needs, a title=tim sykes href=http://www.trade.newsmonster.org/timsykes.html target=_blankTim Sykes/a reported that the Indian steel ministry has set a production target of 124 million metric tons per year by fiscal 2012-13, more than double the countryrsquo;s current annual production capacity of around 54 million metric tons. The government is therefore taking steps to discourage iron ore exports and is even considering a total ban on exports, according to steel minister Virbhadra Singh./p
p Earlier this year the Indian national government raised export duties on lump iron ore to 15 percent from 10 percent and introduced a 5 percent tax on fine ore. Adding to the cost, rail freights have increased by 50 percent. In July, the southern Indian state of Karnataka, an vital ore-producing region, banned iron ore exports altogether. As a result, Indiarsquo;s iron ore shipments are expected to decline by 35 to 40 percent this fiscal year. /p
p class=oneColElsCtrChina recently announced it is increasing the amount of money it will spend buying up mines and commodity producing companies around the world this year, most likely because it knows its need for materials will continue to soar over the next few yearsmdash;and how much more expensive those materials are about to become./p
pThis commodities bull really is the huge one.nbsp; The opportunity of a generation.nbsp; The investment trend that everyone in the late 1990s thought technology would become.nbsp; Invest in a title=binary options href=http://www.trade.newsmonster.org/binaryoption.html target=_blankbinary options/a and in hard, real assets like gold, metals, fertilizer, rare earths, and oil, because they are the most assured way to wealth from now on./p
p The twin themes of China and commodities should be anchors within your investment strategy.nbsp; It is worth noting that not even the worst financial crisis in three generations dented global draws of things like copper, iron, nickel and zinc. Add in financial chaos, runaway currency printing and weak economic recoveries, and frankly wersquo;re surprised only gold is trading at new records nearly every day./p
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