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China’s strong demand for commodities to exceed post-2008 crisis, mining giant says
Mar, 31, 2023 Posted by Gabriel MalheirosWeek 202316
China’s post-pandemic reopening will boost demand for commodities more significantly than it did when the country emerged from the 2008 financial crisis, according to Andrew Forrest, executive chairman of Fortescue.
The Australian iron ore giant began business in China with a 180,000-metric ton shipment of iron ore in 2008, according to the company’s website.
At that time, China managed to avoid a prolonged recession with a massive stimulus program that supported infrastructure development — which drove up demand for commodities.
“It’s like that, but this time it’s only going to be bigger in volume,” Forrest told CNBC on Wednesday, when asked how China’s post-Covid demand might compare.
“Probably around the same or a little less in percentage,” he said on the sidelines of the Boao Forum for Asia. Government leaders and business executives are at the high-profile conference held annually in Hainan province and sometimes likened to the Asian version of the World Economic Forum’s annual event in Davos, Switzerland.
China’s economy is far larger today than it was during the global financial crisis in 2008. In 2010, China surpassed Japan to become the second largest economy in the world.
See below the volume of iron ore (hs 2601) exported from Brazil, another major exporter of the commodity, to China between Jan 2019 and Oct 2022, according to the DataLiner market intelligence service by Datamar.
Iron ore exports to China | | Jan 2019 – Jan 2023 | WTMT
Source: DataLiner (click here to request a demo)
“What we’re seeing now is uniform demand across China,” Forrest said, “and uniform demand but increasing, thankfully, in the supply chain, the ecosystem which will create [for the] renewable energy industry.”
Forrest did not specify which commodities he was referring to. In the six months ended Dec. 31, Fortescue said it shipped a record 96.9 million metric tons of iron ore — up 4% from a year ago.
The Australian miner expects to keep up a similar pace of shipments in the first half of this year, according to guidance shared in February.
This year’s Boao Forum is the first since China ended its Covid-era border controls, allowing more foreign businesses to visit the country.
Source: CNBC
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