According to the World Bureau of Metal Statistics, the global aluminum market was in oversupply by some 1.23 million tonnes in the first nine months of 2013, following a surplus of 539,000 tonnes for the whole of 2012. It’s this quantity of metal above ground which drove prices this week to their lowest value since mid-2009.
From 2005 to 2012, average labor costs in Zhejiang, a hub for private manufacturing enterprises, almost tripled from 14,847 yuan to 41,370 yuan ($6,800) a year, an annual increase of nearly 16 percent.
Zhejiang province is to invest 500 billion yuan ($82 billion) over the next five years to encourage manufacturers to adopt more robots to overcome the short supply and high cost of labor.
The program is underway and will help at least 5,000 companies a year, a source with the investment division of the Zhejiang Economic and Information Commission told China Daily, without giving details.
Copper fell 2.3% on Wednesdays to $3.1595 a pound on the Comex division of the New York Mercantile Exchange, the lowest price since July 31. So far this year, the price declined 12 percent.
Copper has been sliding since Tuesday after China’s Third Plenum — a four-day meeting that sets government economic policy for the world’s second – largest economy—released a broad blueprint calling for markets to play a more “decisive” role in economic matters.
Cotton fell almost 19 percent to 75.85 cents a pound on ICE Futures U.S. in New York since reaching a 16-month closing high of 93.32 cents on Aug. 16. Traders say they expect the state-owned company that controls China’s cotton reserve to sell some of its massive stockpile by the end of the year.
China is hoarding a record amount of cotton to aid farmers as global production exceeds demand for a fourth consecutive year, increasing the risk of a supply surge that would tip prices into a bear market.
In spite of the delivery of new bulk carriers ordered during the shipping golden age, dry shippers bulk freight rates are rising due to Chinese iron ore purchases. The shipowners are back on the bulk carriers spot market to meet the increase in Chinese steel production, the highest in three years, which is driving the biggest jump in shipping rates since 2009.
This increase in steel output has reduced the iron ore stock which fell to its lowest level since 2007. The number of Capesize vessels in service, the largest bulk carriers, increased by 51% in September to 124 from August according to a study by Morgan Stanley. More than 90% were intended for China.
China is the largest importer of raw cotton in the global market. In 2011, the Chinese government began stockpiling cotton in an effort to support domestic farmers through the establishment of purchase prices.
In 2012, the government stockpiled 85% of total domestic output and this purchasing program is set to continue throughout 2013.
China plans to end its cotton stockpiling program and will instead consider subsidizing domestic producers, according to a Reuters news report. Details are sketchy, however, and the new policy may take a year or more to implement.
The Baltic Dry Index, a benchmark of commodity shipping rates, jumped 9.3 percent to 1,478 on Monday, the biggest gain since June 2009, according to the Baltic Exchange, the London-based publisher of freight rates on more than 50 trade routes.
The measure is now at the highest since January 2012, after collapsing from as high as 11,793 in 2008 because of a record shipbuilding program.
The purchasing managers’ index (PMI) figure, published by the National Bureau of Statistics, rose to 51 in August from 50.3 in July. That was its highest level since April last year and exceeded market expectations for a 50.6 reading.
The PMI strengthened for the second straight month and comes as other recent data have spurred optimism a slowdown in the economy may have been stemmed.
Steel reinforcement-bar or rebar advanced 10 percent to 3,735 yuan on the Shanghai Futures Exchange since reaching this year’s low on June 14 and may extend the rally to 20 percent by the end of 2013, meeting the common definition of a bull market according to a Bloomberg News survey of analysts.
In August this year, the purchasing managers’ index (PMI) of China’s steel sector increased to 53.4 percent, up 0.9 percentage points month on month, as announced by the China Steel Logistics Committee which is part of the China Federation of Logistics and Purchasing.
Also, the new order index for China’s steel sector stood at 57.9 percent, up 0.6 percentage points compared to previous month. Meanwhile, the export order index was stable month on month.
Even if you doubt the bit about China, the notion that the US will comfortably beat out Europe and Japan makes sense. It has a more flexible labor market, and cheaper energy and plastics thanks to the oil fracking boom.
Yesterday’s pleasant surprise: The US economy grew much faster than we thought in the previous quarter: 2.5% on the year, thanks to robust exports.