Chinese Economics Thread

[henrik]

How China is de risking iron ore dependency from Australia

https://twitter.com/i/web/status/1824543235655512139

Where are the new sources of iron for China?

 

[antiterror13]

Where are the new sources of iron for China?

Brazil and the new hot source from Africa

 

[pbd456]

Iron ore in guinea won't be online until at least 2025.


Since the demand is weak, it could just cut the demand from Australia and keep the same supply from Brazil, combine with a lower price

 

[tphuang]

Both the dollar value of Chinese iron ore imports and the unit price of iron ore in June 2024 are about half of what they were in August 2021, so China imported about as much iron ore (in terms of volume) from Australia in June 2024 as in August 2021.

That's not what I'm saying. Their total import bill halved due to price drop. That's a function of overall supply vs demand. You can increase supply by working to bring more capacity online and increase number of suppliers.

The % imported from Australia will likely drop in the future as imports from Brazil and other places increase. Domestic production needs to come up.

You can also increase domestic steel scrapping. Which is why those electric arc furnaces are important. They need either steel scrapping or Guinea's high grade iron ore.

So moving away from Australian iron ore is not only better for its security but also for its environment.

Where are the new sources of iron for China?

more steel scrapping, domestic production
more from Brazil
Guinea mine will come online in 2025, so this will only get worse for Australia

 

[pbd456]

Australia is still closer to china comparing to Guinea. So it will always enjoy a cost advantage.

 

[FairAndUnbiased]

Australia is still closer to china comparing to Guinea. So it will always enjoy a cost advantage.

look up what the cost of shipping is vs. cost of item itself.

 

[broadsword]

Australia is still closer to china comparing to Guinea. So it will always enjoy a cost advantage.

Wouldn't Guinea discount their prices to compensate for the shipping difference?

 

[tphuang]

https://twitter.com/i/web/status/1824681072283509056

back when I started posting here in SDF, the prevailing view was that China is better at hardware and India at software. How things have changed.

I am going to write up some Substack entry about how China software industry developed over 20 years

 

[tphuang]

Australia is still closer to china comparing to Guinea. So it will always enjoy a cost advantage.

Guinea iron ore can be used by electric arc furnace. Australian ones cannot.

 

[doggydogdo]

Guinea iron ore can be used by electric arc furnace. Australian ones cannot.

why?