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China news tagged with: commodities (3)

• China’s Commodity Buying Spree

  

  From the New York Times:

  Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable.

  Commodities and shipping executives describe Chinese stockpiling in recent months of a range of other commodities as well, including aluminum, copper, nickel, tin, zinc, canola and soybeans. Starting in April, China began stockpiling significant quantities of crude oil.

  China’s goals vary by commodity. Chinese companies have bought iron ore heavily on the spot market in anticipation of higher prices in annual contract talks now nearing completion. The Chinese government has been stockpiling oil and some metals for strategic reasons, and bought huge quantities of aluminum and canola to insulate domestic producers of these goods from falling global prices over the winter.

  Those extra purchases beyond China’s daily needs have helped reverse the price collapse in commodities that followed the economic downturn, but could also limit the scale of the rebound.

  » Read more
  • June 11, 2009 1:18 AM

• China Goes on a Smart Shopping Spree

  

  Beijing is spending from its $2 trillion worth of cash reserves to acquire commodities — from olive oil to crude oil — at bargain-basement prices. From Time Magazine:

  China’s growth rate may be slowing in concert with the world economy, but even at that slower rate, its economy continues to expand, requiring a steady increase in supplies of oil, copper, aluminum and other minerals. And laying in sources of supply for those commodities also helps it prepare for the next boom. As economies across the world shrink, Chinese officials have told reporters in Beijing in recent weeks that they see a rare chance to expand its sources for primary commodities. “There are editorials in the Chinese press saying that this is a one-in-one hundred-year’s opportunity,” says Erika Downs, China energy fellow at the Brookings Institution in Washington. “There is a sense that this is a moment to be seized, that with competition lower they can get a good deal.”

  Recent deals with Brazil and China highlight Beijing’s ability to use loans a means of securing energy supplies. In mid-February, Beijing negotiated a $10-billion loan to Brazil’s state-owned oil company Perobras, as well as a $25-billion loan to Russia’s state-run oil company Rosneft. Both companies’ revenues have plummeted in recent months as crude oil prices fell by more than two-thirds. China offered large cash amounts in a tight credit market, but rather than require that the loans be serviced and repaid in cash, Brazil and Russia will repay the loans in crude oil supplies to China over the next two decades. Russia will ship eastern Siberian oil, while in Brazil, China hopes to get a share of major offshore fields which have recently been discovered. So, no matter what happens to the global economy, China is assured steady oil supplies over the next 20 years from two major oil-producing countries, in regions which are far more politically stable than China’s suppliers in Africa.

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  • March 2, 2009 8:26 PM

• Jim Lobe: The Hungry Dragon

  

  Asia Times has two articles about the global impact of China’s hunger for natural resources: “Commodity prices skyrocket” and “Too much for Mother Earth“:

  China is snapping up resources at an unprecedented rate, driving world commodity prices through the roof. But more alarming is the scenario 25 years down the line, when China’s per capita income could cross that of the US, writes Jim Lobe. If these increased incomes translate into the kind of lifestyle currently enjoyed by many US citizens, Chinese demand will wring the planet dry of its resources.

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  • March 24, 2005 2:23 PM

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