Originally Posted by
sledge
I wrote a paper in college in 1996 or 1997 about how China was to be the next global dominator.. and surpassing the U.S. My professor said something to the effect of "Well written paper.. but doubtful" I got an "A" on the paper because of how I am able to make my case and back it up... but I have to say I wish I wasn't correct.
If you want to see how much we are reliant.. just look at scrap.. if China has low demand for our steel (as is the current situation) guess what- steel prices take a dive. When they have higher demand for steel- our steel prices (and thus
scrap prices) rise. Although they are not the only buyer of our raw materials- they make up enough of the percentage that they basically are the tipping point for supply and demand and thus prices.
working for a company that imports directly from overseas, largely china (some taiwan, korea, japan, canada and mexico, but probably 75% from China) I see the market fluctuations on a weekly basis. And it goes hand in hand with the scrap pricing as well. Scrap prices tend to take a dive right before "Chinese New Year" and then spike back up about 4-6 weeks later. And since there is a slow boat to account for, everything tends to happen 6-8 weeks before. Making it seem like there is no relation between the two.
If china needs steel or copper in August, the price will rise in June. Then if they don't need as much in October, the prices will fall in August when they are in the middle of using what they ordered from us in June.
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