Tags: china | recovery | iron | ore

Flickering Signs of a Chinese Recovery

By Greg Brown   |   Wednesday, 04 Mar 2009 09:05 AM

Iron ore miners in Brazil and Australia are dragging their feet on setting prices for the coming year in hopes that a nascent recovery in China will help them avoid a big cut.

Executives told the Financial Times that negotiations that normally conclude this month would be put off until as late as the summer to see if the flickering Chinese factory economy might reignite.

“All the incentives are to wait and see,” said one.

The biggest producers are CVRD in Brazil, Rio Tinto and BHP Billiton in Australia. China’s Baosteel is the biggest buyer. Prices set on ore now determine the price of steel and eventually of many consumer products around the world, like cars.

Prices rose by 85 percent in the last 12-month price agreement after seven years of increases, so miners do expect a decline. How much is the issue.

Asian markets shot up overnight despite a down close on Wall Street Tuesday on expectations that Chinese manufacturing numbers showed that huge government stimulus spending there — now expected to grow even larger — is making a difference.

The Chinese purchasing managers' index hit 49 for February, up from 45.3 in January and the third month of increase. Any reading above 50 is sign of manufacturing growth. The record low in November was 38.8.

"The February reading in particular is suggesting manufacturing activities are getting back close to expansionary territory," Yu Song and Helen Qiao, economists at Goldman Sachs, told their clients, according to Bloomberg News.

© 2017 Newsmax. All rights reserved.

1Like our page
2Share
StreetTalk
Iron ore miners in Brazil and Australia are dragging their feet on setting prices for the coming year in hopes that a nascent recovery in China will help them avoid a big cut.Executives told the Financial Times that negotiations that normally conclude this month would be...
china,recovery,iron,ore
247
2009-05-04
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved