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Visualizing China's Mind-Boggling Consumption Of The World's Raw Materials
Over the last 20 years, the world economy has relied on the Chinese economic growth engine more than it would like to admit. The 1.4 billion people living in the world’s most populous country account for 13% of global GDP, which is significant no matter how it is interpreted. However, in the commodity sector, China has another magnitude of importance. The fact is that China consumes mind-bending amounts of materials, energy, and food. That’s why the prospect of slowing Chinese growth is likely to continue as a source of nightmares for investors focused on the commodity sector.
Courtesy of: Visual Capitalist
The country consumes a big proportion of the world’s materials used in infrastructure. It consumes 54% of aluminum, 48% of copper, 50% of nickel, 45% of all steel, and 60% of concrete. In fact, the country has consumed more concrete in the last three years than the United States did in all of the 20th century.
China is also prolific in accumulating precious metals – the country buys or mines 23% of gold and 15% of the world’s silver supply.
With many mouths to feed, China also needs large amounts of food. About 30% of rice, 22% of corn, and 17% of wheat gets eaten by the Chinese.
Lastly, the country is no hack in terms of burning fuel either. Notably, China uses 49% of coal for power generation as well as metallurgical processes in making steel. It also uses 13% of the world’s uranium and 12% of all oil.
These facts really hit home to show how important China is to the global consumption of raw materials. If China is unable to navigate its tricky transition to a consumer-driven economy and has a “hard landing”, it will be unlikely to see any growth in commodity prices triggered from the demand side. That said, supply is equally as important and it tells a different story: with companies like Glencore cutting copper production by 400,000 tons to better service its massive debt, the floor for commodities could be in.
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They are the teeth to our anus...
....and they are teeth on our ankles, those pesky little anklebiters.
However, they refuse to have anything to do with Hillary's cankles. A shame that.
48% of world's Cu consumption, 50% of Ni...
No wonder the export economies of S America are doing so badly now.
Fits the theme I am seeing of everybody cutting consumption. Worldwide recession dead ahead.
China needs to consume more sugar, corn, wheat, soy beans, tobacco, corn fed beef, corn fed pork, and corn fed chicken. It's like they aren't even trying anymore.
Meanwhile, Canadians borrow like the commodity party will continue.
http://www.planbeconomics.com/2015/07/canadas-debt-continues-to-spiral-o...
Recession or depression is already here, been here since 2008.
The illusion has been run by kool-aid, btfd, and shear everything is awesomeness.
Wait until you see what is coming... It's going to be very ugly.
Not to worry. The Indian economy is ramping up into high gear and will make up for any slack. 50,000 km of road to be added in 6 months among other things.
http://timesofindia.indiatimes.com/india/National-highways-to-grow-by-50...
Did Gartman call a bottom or something? I figured that would be the real nightmare for the commodities folks...
China's consumers? There's 70,000,000 apartment/condo units unoccupied. Countless empty malls, too. How many ghost cities can China's consumers consume?
It took a lot to build them, not so much to watch them deteriorate. But, hey, they made for great GDP numbers and the government favored contractors made some great money.
Geez..
Their pooperty boom seems to me to be their equivalent quantitative easing.
I wonder how much of the toxic paper for that scam sits on the PBoC's balance sheet now...
or soon will be.
We may find out soon how big the scam was, is and will be.
How do you say Credit Default Swap in Mandarin?
I'm only on modual 2.
Kung Pao.
there's 98,000,000 us citizens without a job, and 50% borderline homeless in the lot...
that would gladly consume a 'shovel-ready-job' for a chopstick full of hopey`changee american made chow mein
we could start with chicago or detroit and every major city in a country of exceptionalism with mexico swallowing west to east the poverty paradox awash in heroin and meth
Thanks to Prohibition the profits are good for heroin and meth.
comparing to the whole chinese re, that is nothing.
If that figure is credible then it represents an overshoot of less than 16% of homes as a percentage of households.
For comparison, in 2008 the US had stock of unsold housing units of 4,500,000 just under 4% overshoot.
But the Chinese people are undergoing a huge move to cities from the countryside - that huge migration and upgrade process will eat up those 'spare' homes and even cities in short order.
A surplus of housing is needed - the downside may be that the ordinary Chinese may be the ones paying for the cost of holding the stock.
https://en.wikipedia.org/wiki/Rare_earth_industry_in_China
and there you have it...
Point made, point taken. But the article is out of date in that fast-moving industry.
Molycorp recently SHUT DOWN Mountain Pass, and the company is bankrupt.
Resolving rare-earth metals production to our favor (USA) will be expensive and risky, but we should go for it anyway. There *seem* to be worthwhile deposits in Canada, Greenland, S. Africa and even some in the USA. But it will be very hard to take market share from China because they are so lax re their environment AND they are using more of the rare-earths to build their own technologies.
Ha! HA! We are Fu@%ed. The human species is worried about a freaking i-phone and in reality, we are all retarded.
Speak for yourself.
It's easy for China to copycat their way for low hanging fruit economic gains when others have laid down the innovations priors, but its a steep uphill battle from there on.
you don't read much? do you.
duplicate
so sorry
And how much of the consumption and production was to satisfy the ever increasing market caps of publicly traded corporations regardless of actual need for the products?
When much of the world transfered the bulk of their industry to China, did people expect China to not consume more than the rest of the planet?
Millions of cars are sitting in storage lots never to be sold. Hundreds of billions worth of product is produced every year that is never consumed. It is produced to satisfy an apparatus that needs never ending growth.
We could allow corporations to fail. We could allow true price discovery for commodities. But know if a oil company cuts back because demand isn't there, it causes prices to skyrocket. Once again making no sense whatsoever.
Let me put ot this way. If you are a company and you are seeing demand for your product decline, and there is more product in storage than ever before, wouldn't you cut back on production? Why would you produce more?
Wouldn't you also want prices to go down in order to stimulate more demand to hopefully reduce your inventory?
The game of financialization has demolished all sense of rational economics. It makes no business sense. The crazy pills are flowing like Meth from a trailer park.
"Let me put ot this way. If you are a company and you are seeing demand for your product decline, and there is more product in storage than ever before, wouldn't you cut back on production? Why would you produce more?"
Because you doubled down on the limitless growth fallacy and it's become even more expensive to quit than to just keep producing?
I'm thinking that the infrastructure and supply lines involved in mining are assets that, when shut down, will never be reopened.
I've said it before I'll say it again. The median empty Chinese unit is "valued" at around $300K USD. Median income is around $12k. Do the math. Either the the median income skyrockets or the property prices crater. It can't be any simpler than that. Price solves all problems. Capitalism one-oh-one. Which one do you think more likely?
Until they clear this inventory of 70 million+ units no one is going to be building much of anything.
I went back to my ancestral homeland in China, and I was stunned when I found out that building a house on already free land in the middle of bumfuck rural nowhere still costs $50K. You'll be surprised just how bloody expensive living in China is even in backwater areas relative to the income of an average man, much less their densely populated cities.
I have the simple answer: don't pay someone to build it. You live in bumfuck nowhere, build it yourself. How? Break every single law you can in construction. Apply for no permits. Build it how you want to build it, with your own knowledge.
The product only has to be liveable for you, not anyone else. If that means you want toilets, and are willing to do your own plumbing, do it. If not, well, outhouses have been used since...forever, and people are still around. Shitting in an outhouse won't kill you.
If you need electricity, you'll find a way to produce it yourself, whether it's solar panels or windmills. If you're ballsy enough to live without electricity, more power to you. Fewer things to give you away to authorities that will demand their piece of your pie.
But that's all there is to it. Go Galt. Don't pay taxes. Don't provide for anyone but you (or at the maximum, the people YOU like).
I'm pretty sure disappearing into the bumfuck nowhere of China is far easier than doing it in the Midwest of America.
Idiot. You can not get a mortgage unless the building is adequate, you can't gain equity and flip a house if not built properly, You can't keep the elements out if not built properly .....
Yes permits are a revenue source but building codes usually ensure proper construction. You can still build using straw, logs, stackwall, concrete, lumber, earth - just present a safe and adequate design for a structure that will be safe and healthy for a family. Or just fuck off and go live in a cave.
"you can't gain equity and flip a house if not built properly..."
I stopped giving a fuck about your opinion the second you said that. Building something for money is secondary to owning a place to live.
However, I will rebut you.
First, let's talk building permits and codes. Did you put in the paperwork for your concrete driveway, and pay the processing cost? Did you hire an approved contractor at $200/an hour so that they could put some PVC pipes in your house for plumbing? Did you outline your property for some random official, so that they can tell you that there are no underground pipes in the middle of Nowhere (oh, and more paperwork processing costs)?
What exactly did these "services" add to the value of your property? None. Absolutely none.
Secondly, you told me to fuck off and live in a cave.
I would gladly do so, and in the future, when I "retire" (which is zooming here faster and faster these days), I plan on doing just that. A cave that I will make, while substituting permits with common goddamn sense. If I want indoor plumbing, or a septic system, or a composting system, it will be my own choice, and my own design. Nobody will tell me "No, you have to do it this way, Mr. Woar, or the Homeowners Association will kick you out of the Neighborhood."
I'll make my own electricity, my own nails, my own tools. That hole in the mountain will be mine, and it will be impossible for me to give less fucks about your opinion, since I will be completely out of fucks to give.
Thirdly, you can make a house out of anything. Fuck, they have haybale houses, and that shit works. Look up Earthships. Those are amazing, and, surprise surprise, they're illegal. Why? Because THEY WORK, and don't put people into DEBT. Don't pretend to tell me how a structure should be made, when I see unorthodox methods work. If it's stupid and it works, it's not stupid.
Trouble is...you don't own the land. Pay property taxes or you will be evicted, at gunpoint, in favor of someone more amenable to extortion.
You never really own it - idiot. If you do not wish to build a future for your children then you might as well put that gun in your mouth now.
Work to design better buildings (more efficient, environmentally friendly etc ) then present the plan in an educated manner that will withstand engineering scrutiny.
Or move to a less regulated community in this country or where ever you will find the freedom from laws but be prepared to have unscrupulous people screw you over in areas that you do not understand - good luck with a substandard sewer system.
Idiot, I have seen many straw bales houses, earth houses, earth sheltered houses - learn to read what I said.
Many farmers of yesterday were independent but it took good mixed farming and many children to handle the work. Others have tried to live in independent societies like communes or Jonestown and most failed.
Some people run off into the wilderness to live on a mountain-side but most die or give up in a short time. I do not like where society is going either but we must change it as a community because there are way to many people to go back 300 years.
Idiot, try and find that pure steam with plenty of fish, the woods with much game, the pasture for your animals, the soil for your garden, etc - I have most of this but still have to conform to many rules of society - taxes, proper waste disposal away from potable water that the folks downstream rely on, control of my fires, and medical services, to name a few.
WOAR I know it is hard when you hit bottom but like the rest of us, you can pull up your boots and make something of yourself.
"If you're ballsy enough to live without electricity, more power to you."
lol
: 0
Well said Doc, we still haven't cleared inventory in US. NAR news releases can suck my dick. They are full of themselves.
It is a LONG landing and with it the Commodities. Until the Spins decisively tilt towards "doomsday for Commodities", this space is still not ripe for harvests, except agricultural commodities. Much preferred the food processors in China climbing the tech ladder while playing the agri space.
good info.
NYSE Rule 1005
https://twitter.com/nanexllc/status/561905351520702464?lang=en
Makes Rule 48 look like pissing in the muppet bowl of cheerios.
Makes me want to sell off all my shit, buy bullets and beans, and move into the woods and stuff.
Or not.
Once they finish building their 1000 new airports,all the new railways ,cities and electrical grid ,China will no loger need those million steel plants and all that cement.At the current rate they are building the electrical grid equivalent to all of England in one year. The scale and speed of their projects is downright scary but they will reach a plateau soon. Uranium use will quadruple along with oil. The biggest ,longest,tallest,fastest will all belong to China.The world will become more dependant on China for their for their higher value goods instead of current high volume dollar store junk ,which wastes their energy.You may have already noticed that a lot of low value micky mouse products are no longer imported from China but are locally made. California has even bought a mega bridge from them that no US company could have built. Designed in USA made in ROC to save $billion.
It's all based on air/credit. Even with the recent shenanigans the yuan may be the new "exorbitant privilege", based on the breadth of their command/control and their shadow/shadow banking system. If you sell stocks you go to jail, you can be sure if you pry open the non-performing loans box you're scheduled for the mobile execution van. They can think of lots of new ways to expand the Ponzi, look at Japan, BOJ will own 100% of stock ETF issuance by 2017 and the 10-yr JGB went bidless for more than 48 hours...
This is waste-based economy at its worst!! That is why the Chinese has been labelled as locust !
The fallout begins..
http://www.dailymail.co.uk/news/article-3231568/Humbling-Master-Universe...
Is it really "consumption" when you use raw materials to build cities in the middle of nowhere that noone wants to live in? 0o isnt that just waste? not consumption?
Yes unless you come up with a way to convert concrete into usable raw materials.
build cities in the middle of nowhere that noone wants to live in?
All the documentaries I have seen (on the internet) say all those units have been purchased. They are not speculative by the builders. I haven't seen the hard data. And we haven't seen default figures either. Of course we haven't see default figures through all of recorded history. We just say debt high ... that's bad.
Who cares? If they don't use it it'll just stay in the ground, but if they want it they they have to invest to get it. I'm pretty sure they'll figure that out in about 2 seconds flat. A debt bubble consumption level is not going to continue at that rate, and if people were stupid enough to not seen that, again, who cares?
They all should learn the hard way not to do that, and lose everything they thought they had.
Humanity does not need the idiots who create debt bubbles and the instability and damage to society that follows.
They excuse it with saying like, "Better to have boomed, than never to have boomed at all."
No, not really. It would have been much better to have a 'development' model not based on exorbitant debt growth and usury theft, as that would not have actually fallen in a heap at all.
The great advantage with ghosttowns over financial bubbles is that you can pollute your country at the same time.
Now why dont we just have em both? Ah yes the problem in our west is that noone wants to work.
Canned beer, chicken nuggets and corn syrup, all that a modern man needs.
Falling commodity prices shows the stuff real products are made from are no longer in demand.
China is just the world's manufacturing base where real products are made.
The West used to buy these products but is no longer doing so.
China is an intermediary between raw materials and Western consumers where the raw materials are made into products for Western consumption.
China is suffering from the collapse of the West.
Exporting nations are reliant on the health of their export market and becoming too dominant actually heralds their own demise.
Ditto Germany.
This level of consumption leads to millions upon millions of Chinese peasants shitting on the side of the road.
The Chinks should "consume" more porcelain.
One mind boggling "fact" is the inaccurate gold consumption figure of 23%. Based on SGE withdrawal figures that number should be right around 100%.
You can't eat concrete... or gold, or your house, I guess, though I keep having odd cravings for roof shingles coated with whatever the chemtrails are laying down in the sky.
On a mroe serious note, thanks to Mr. WOAR above for insightful analysis and downright gritty retorts.
I bought some land in rurual upstate NY this past April. I was too late and too busy to get crops in the ground, and in some ways, it turned out OK. You can't walk 1/2 mile around here without bumping into a farmer, and there are too many - seriously, too many - roadside stands selling everything from home-grown potatos to peaches and everything in between.
Yesterday, I drove out from my property and about 600 yards down the road, my neighbor's stand was overflowing with produce. I purchased three HUGE spaghetti squashes for $2. Two bucks. Less than a gallon of gas. I guess next time, I'll jsut walk down the road, save the 40 cents on gas and get some exercise. These squashes are BIG, like the smallest one I bought is five pounds.
GF bought a bunch of tomatoes at three for a dollar. Sauce will be on the stove tomorrow and the squash will be either in the over or on the grill. I haven't ever tried cooking squash on a grill, but seriously, all it needs is to cut it in half, set face down on some aluminum foil (if the Chinese people haven't used it all up already) and cooked for about 30 minutes. I think my grill should do a perfect job as an outdoor oven.
Spaghetti squash in tomato sauce is awesome, especilly with some sausage and grated Parmesan. It's also incredible as a substitute for linguine, as in linguine with clams.
Any other spaghetti squash ideas are welcome as my farmer friend down the road has maybe 300 more of these monsters available.
My wife does this, but I'm not sure if you have to bake the squash first: sautee the spaghetti squash (after you have taken the spaghetti-like squash flesh out of it with a fork) in olive oil and garlic and some basil too. Yum. One thing about the harder squashes is that they will keep for quite a long time when stored properly. Good for over wintering.
Oh Holy Gods of the NWO, Oh Georgy W Bush, Oh Bill Clinton, when you first made China into most favoured friend and pardner in outsourcing, after converting great helmsman of pingponging into China's capitalist about turning, you did create the Monster we now decry; you the two Marco Polos of Pax Americana's deindustrialised turning into a financialized jackassery.
Oh Billy boy, oh Georgie boy, what have you spawned ? !!!
And China now OWNS the world global financialized game!
If China sneezes Dilma gets mumps and Mutti just dumps; all the while Yellen just pumps steroids and Lady Lagarde looks like a Tutsi water carrier on the slopes of Kilimandjaro!
CRYING for King Solomon's devalued mines! Now worth not even a dime!
Great balls of fire Mr Glasenberg of Glencore !
"Oh Holy Gods of the NWO, Oh Georgy W Bush, Oh Bill Clinton," - Oh Long Johnson...
Sorry, couldn't help myself.
https://www.youtube.com/watch?v=xjKi944CzGA
Why all of the sudden is everyone worried about the "Global Economy?"
WTH? Maybe I should start worrying about my welfare neighbors too. I could pay their rent every month, cut their grass every week and put mufflers on all their junk cars. After all, without them where would I be?
I say F&^K China's and anyone else besides our own economy. Let them worry about themselves.
Contemplate the input stats, population, and buildings. Then factor out the BS financializtion of Amercan economy and look at income side. China probably has bigger economy measured in that, more realistic, way. America still has the mythology that it can convert to war production ala WW2. Folks, that infrastructure was exported to China and Mexico after the Nixon Shock.
The US economy is the 2nd largest mfg economy in the world. If you believe Chinese stats.
China also consumes 92% of all chicken feet and 96% of all duck feet - so they have that going for them too.
The rest of them are thrown away.
YUM.
Once ground any tissue makes for a good nugget.
And we all get that back in dangerous low quality crap that doesn't last a few weeks.
It consumes 54% of aluminum, 48% of copper, 50% of nickel, 45% of all steel, and 60% of concrete. In fact, the country has consumed more concrete in the last three years than the United States did in all of the 20th century.
How much of this are they actually consuming vs how much goes out in the products they manufacture?