Column: Iron ore outlook dims as China inventories, steel output fade
Recent price moves and data on China's steel sector, which accounts for just over half of global output, have been bearish.
Despite a decline in quarter-on-quarter GDP numbers implying a soft landing for China’s red hot economy, Patrick Chovanec says that fixed investment is still running at an unsustainable 23.4%, and the effect of China taking on more debt to build housing and other infrastructure that people just aren’t buying could be parlous:
Unfortunately, the steady but moderate decline in China’s growth rate is not evidence of a “soft landing.” A landing, as I see it, means a qualitative as well as quantitative adjustment that puts the Chinese economy on a path to sustainable — rather than hollow and inflationary — growth. By that measure, China hasn’t come in for any kind of landing at all. It’s still circling up there in the stratosphere, not daring to land … all the while, running out of gas.
China’s year-on-year GDP came in at 9.1 percent in the third quarter of 2011, according to the National Bureau of Statistics. It was a decline from 9.5 percent GDP, which was announced in the second quarter of this year, and 9.7 percent declared in the first quarter of 2011.
