Directors of mining companies genuinely believe the Chinese Cinderella story, and there is a very s

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First three quarters of this year China's iron imports grew by 11%. The truth is that I was expecting him Iron grow this year, because I thought that will apply to a slowdown in the construction industry. Total China imported 508 million tons - which brings the import rate to 650-700 million tons per year.
Can be seen from the table that I made, that the total global iron exports should rise from about -965 million tons this year to 1.2 billion tons in 2013. On the demand side, I believe in -2013 at the latest, will begin a major drop. There are two reasons why the demand for iron rose in China:
I will start with the second point - I did not expect the Chinese to their target will build 10 million subsidized apartments public construction, penta transaction but they reportedly passed this goal, and will be built this year more than 10 million units. Without getting into the point whether these figures are accurate or not, in any case two years will begin a significant decrease in public construction. According to the government program, 36 million apartments will be built in the five years between 2011-2015. 10 million units in each of the years 2011 and 2012, then the remaining three years will be built another 16 million apartments - or about 5 million dwellings per year.
That is, even under the government program, a record of public construction will be this year and next. When in 2013 will fall significantly in construction. Course of construction penta transaction will be leakage from year to year. Although this year, for example, the Chinese began to build 10 million apartments, but the end of the construction penta transaction of most of the apartments will only occur next year. So that in -2013 still be massive construction of apartments whose construction began in 2012. But as the year 2013 progresses, so will slow construction.
We will first point - a drop in the purchase of apartments is already a done deal. In the third quarter of the year fell by 16.8% in purchases of new homes in 65 major cities penta transaction in China. penta transaction But the pace of construction of contractors has not slowed down, and even rose. Of course, this situation can not continue. Inventory of vacant dwellings rising day by day, and when contractors were Ialtzo download the pace of construction. I think it will happen very soon - within a few weeks or months.
In any case not later than -2013 will start building a significant slowdown in China - the contractors will build much less today (I think less than half), and public construction will be reduced by half. Does not take a genius to figure it out. Somehow iron companies see the situation differently from me, and intend to increase the rate of iron mining in the belief that the Chinese iron consumption will continue to rise. Conference held recently in Qing Dao, iron barons penta transaction estimated that Chinese demand will rise and will require imports of billion tons in 2015.
Iron intoxicated, no doubt very optimistic about China. This optimism leads them to increase the offer iron, and investment of tens of billions of dollars - something they will regret it bitterly about. Severe penta transaction than that, it seems that this time even when it will be clear to the world and his sister Cinderella story of China's over and the clock has been called 12 times, companies will continue to rise iron mining penta transaction rate - that is token going to fall for them very, very late. The reason I believe this is what comes along is inexplicable optimism CEOs of mining companies. For example, an investor conference held by Rio Tinto (NYSE RIO) a few weeks ago, the company's CEO said that this time they will not do the "same mistake" they did in -2008 - so they have cut mining expansion program. In his opinion it was a mistake to cut spending because of the crisis moments, so even if Chinese demand for iron will drop, they're going to continue penta transaction to increase the mining rate, because they believe in the long run Chinese demand will only cost (even if they are small falls on the way).
Directors of mining companies genuinely believe the Chinese Cinderella story, and there is a very simple explanation - they believe in it because they want to believe. One of the most interesting books I've read is the Influence: The Psychology of Persuasion one of the things that shows where Tz'ldini is that people believe what they want to believe. The facts never confuse us. If we want to believe in something, believe in it - regardless of the facts.
Mining company executives get paid to increase profits of the companies they run. The way to do this is to increase production. To increase production, should be in demand. Means that managers get paid depends on Chinese demand for iron, which is why they believe that the demand will grow - even when all the data indicate otherwise. Bruni-iron distort reality to make it fit their example.
At least what I understand, it meant the picture is Shanghai (after a huge development in recent years) penta transaction already looks similar to New York, and now the turn of the smaller towns (like Xining) to develop. Xining is the capital of Qinghai Province, which is one of the poorest penta transaction provinces in China. The population is largely Tibetan name. The area is arid and poor. Come to think of Shanghai last development should go now to cities like Xining, that's like saying - now that we have built the Azrieli buildings in Tel Aviv, these also need to build in Beit She'an.
In the US there is only one New York, and maybe another 2-3 cities with impressive skyline. China needs to 4-5 cities with an impressive number of high-rise buildings - Governor - Shanghai, Hong Kong, Guangzhou, Shenzhen and maybe one city or two in the center or west of the country - the Governor - Chongqing and Wuhan. There is really no need for more than that, and anyone who thinks that in a few years will be in China 100 cities make them look so New York, going to be disappointed.
Not only assumptions about growth in China as presented on this page is too optimistic in my opinion, but even if the number of vehicles per thousand-man will come to 120, if the per capita housing area reaches 43 square meters per person, still eighth