Hungry China devouring commodities on her way to becoming the world first economy might be both a threat and a blessing to the world. The blessing goes to developing countries that will sell their commodities at competitive prices and the threat is about the fact that "'feeding the dragon" might mean a drastic reduction of the world's natural resources.
Aluminium prices it's been very stable over the last years even when the demand increased, but how about Neodimium ( magnets) This year the price increased more than 400% in the consumer market.
Strip away the word "China" and the scenario you describe suits the 1999-2000 technology bubble perfectly. The tech market was surging with no end in sight and orders were being fulfilled without question. The drop was sudden and painful and devastating for many companies. I hope this isn't "same story, different day" but many of the trends are the same.
Especially with the Japan's disaster, it will need to be rebuilt pretty soon. Japan does not have alot of natural resources. As a result, it will look to nearby countries for the material such as steel and aluminum. This will reinforce the demand for commodity
Especially with the Japan's disaster, it will need to be rebuilt pretty soon. Japan does not have alot of natural resources. As a result, it will look to nearby countries for the material such as steel and aluminum. This will reinforce the demand for commodity
I think Japan did not have many resources even before the disaster, that's why a watermelon is so expensive over there.
The law of the offer-demand applies everywhere anytime, and if is not happening the supplier/vendors will force it.
Ps.
I remember one guy had a tire shop repair and created some damage on the road two blocks before and after the shop location, can you imagine what big companies will do to get customers pay more for their goods?
WOW... those numbers are amazing, China is simply too much. And it's continuing to grow.
I don't think the soaring prices help developing countries, they simply help the suppliers but overall a developing country could use cheaper steel, etc for it's own industry. If it *has* to export everything because the prices are simply to high to not take advantage of them, the domestic industry will lack supplies.
" If it *has* to export everything because the prices are simply to high to not take advantage of them, the domestic industry will lack supplies."
Hi Mr. Roques,
The problem is that there are hardly substantial domestic industries in such developing nations and their only means of survival is to sell the countries' raw resources overseas. Maybe they should preserve such recourses for future use. But most of the leaders in developing nations seem to just be thinking about the present.
Any system that grows too quickly will inevitably overshoot and drop as the system corrects itself. As such I expect the boom will be followed by a bust of some sort. Another interesting thing to consider is the effect Chinese investment in other countries will have on local economies. Increasingly China is acquiring commodity supply companies (like mines and processing plants) in many other countries and instituting Chinese style work practises there. This could upset local balances and disrupt local economies.
With China's frenzy on commodities, along with many other developing countries, it would appear that alternative sources are needed and needed soon. Some of these commodities will disappear soon and unless we come up with alternative ways to meet our demands we are going to have serious global ramifications. Take copper for instance. Copper is the main conductor of electricity used for wiring worldwide along with aluminum. Copper is the better choice. If the supply gets too expensive or dries up, how are things going to get wired in the future? This is just one example of how we need to look at alternatives since growth is inevitable.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
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Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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