Hey guys,
I posted a similar thread in "Let's Talk Business". I am interested to hear this coming from Aus. I am working in China and our stocks of Alu have gone up a bunch. The Shanghai index has been pretty steady if not rising, but the amount of Alu stock we see in our yard and others yards is rising quite a bit. This is making it quite the buyers market. For example, the ratio of cast and profile alu price / index price is way lower than it was last year. I am not sure what to make of it myself.
Big picture, China is slowing down for the moment. I am a US guy, but i've been here in China for many many years. I am no expert, but here is my 2 cents.
China is a HUGE trading partner with the EU and all the recent disasters (and continuing disasters) have caused a bit of worry. That said, it's my opinion that even a complete meltdown would jolt the Chinese economy, but not break it. The Chinese government is embarking on a once in every 10 year leadership change. This will happen in Sept / Oct I think. It doesn't matter what type of government, democratic, communist, whatever... the new guy coming in is always cautious at the beginning. And here in China, they have 10yr terms, so they have a bit longer to be cautious and figure out which way to go. Interest rates are steady and bank reserve ratios haven't changed too dramatically from what i've seen, but it just feels like everyone here is waiting on the leadership change here, in the USA, and what will happen with the EU / euro. Over the past year pr so, China has but some serious curbs on private lending and that has had quite the effect on housing demand and new construction so... maybe there is your Alu drop. Why it has been even more pronounced recently... I got no idea. My personal opinion is that within a year China will make a decision as to whether it wants to permanently cut growth to 5-7% per year, or to "release the hounds" and let lending go crazy again. But hey... what do I know?
Anyway, sorry if this is all stuff everyone already knows. Like I said, just my 2 cents. Regardless... let's hope we can get some better prices soon!
USG
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