• 5 minutes Trump will capitulate on the trade war
  • 7 minutes China 2019 - Orwell was 35 years out
  • 12 minutes Glory to Hong Kong
  • 15 minutes ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 3 hours Peaceful demonstration in Hong Kong again thwarted by brutality of police
  • 2 hours Here's your favourite girl, Tom!
  • 3 hours Civil Unrest Is Erupting All Over The World, But Just Wait Until America Joins The Party...
  • 4 hours Australian Hydroelectric Plant Cost Overruns
  • 42 mins Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 57 mins China's Blueprint For Global Power
  • 1 hour Nigeria Demands $62B from Oil Majors
  • 17 hours Brexit agreement
  • 1 hour IMO 2020:
  • 4 hours Ford Planning Huge North American Charging Network
  • 20 hours The Problem Is The Economy, Not The Climate
  • 18 hours 5 Tweets That Change The World?
  • 17 hours Bloomberg: shale slowing. Third wave of shale coming.
Alt Text

Are We Really Facing A Battery Metal Shortage?

Electric car builder Tesla foresees…

Alt Text

Vanadium Spikes On New Chinese Regulations

A new regulatory measure in…

Alt Text

Investors Return To Plowing Money Into Commodities

Commodities are trending once again…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

A Wave of Steel

China is the key to the metals markets today. And there are some important signals about this market registering in the last few weeks.

Last month, I wrote about diverging global shipping indexes. The Baltic Dry Index, which tracks global shipping rates, has been falling the last several weeks. While the China Containerized Freight Index, tracking solely Chinese shipping prices, has been on a tear. The CCFI is up 12% since the beginning of January.

This could indicate an increase in goods being shipped out of China these days. And those goods might be metals. A few weeks ago, odd shipments of aluminum started showing up at ports in northwest Japan. Speculation is these sailed from Shanghai.

If China is indeed starting to re-export its vast stockpiles of metals built over the last year, there are major implications for prices. There is a lot of supply that could "hit the street" in a hurry.

Some more evidence of re-exports emerged last week.

The European Commission reported that Chinese applications for steel imports into Europe were up 50% in January, as compared to December 2009. Chinese exporters applied to send 244,000 mt of steel into Europe.

Overall, China accounted for 16% of total import applications during the month. The first time in over a year that China represented the largest volume of import orders.

These applications don't guarantee shipments will be made. Exporters are under no obligation to actually send the amount of capacity they apply for.

But this is a development to watch. If these exports do materialize, they represent a large wave of steel breaking over world markets. Running contrary to the conventional wisdom that rampant development in China is sucking up any raw materials the nation can get its hands on.

If China isn't using as much steel as we thought, what's happening to stockpiles of copper, coal and iron ore?

By. Dave Forest of Notela Resources




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Anonymous on February 24 2010 said:
    Good story and a great heads up to producers and investors.
  • Anonymous on February 24 2010 said:
    Please keep us posted. Great article.
  • Anonymous on February 25 2010 said:
    What about Gold and Silver?
  • Anonymous on February 25 2010 said:
    Any chance they're shipping overstocks and making gains? We know there are building halts so it does raise questions about new demand. But I'm wondering if they bought low...made some deals in Europe, then ship some tonnage every once in a while without crashing prices. Then build up stocks again at slightly lower prices later?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play