China to produce 350 million tons of steel in 2005: official

[oneman28]

China will produce 350 million tons of steel this year and the country's consumption of steel is expected to see steady, not rapid, growth, an official at the China Iron and Steel Association has said.

Domestic steel consumption growth dropped from 28 percent in 2003 to 15 percent last year, Qi Xiangdong, vice secretary-general of the association, was quoted by Wednesday's Economic Daily as saying.

He predicted at a meeting here on Tuesday domestic steel consumption would reach 343.83 million tons this year, an increase of 31.53 million tons over 2004, up 10.1 percent, on the basis that China's GDP would grow 8 percent and the investment in fixed assets would increase 16 percent this year.

He said that the price of steel would remain high this year due to sustained global economic development and short supply of panel,

According to the meeting, sponsored by the Ministry of Commerce, China made a historic breakthrough in imports and exports of steel last year due to the implementation of measures aimed at promoting structural adjustment in the country's iron and steel industry, which started in 2002.

China imported 29.3 million tons of iron and steel last year, down 21.1 percent over the previous year, while exports reached 14.23 million tons, up 104.6 percent, reported Economic Daily.

Statistics from the China Iron and Steel Industrial Association show that in the first two months of this year, China imported 530,000 tons of steel, a decrease of 90.6 percent over the same period of 2004. Its imports of panel steel reduced to 1.78 million tons in the January-February period this year from 3.65 million tons during the same period last year, down 67.2 percent.

China's steel output has ranked first in the world for nine consecutive years, accounting for 14 percent of the world's total.


http://english.people.com.cn/200504/...06_179796.html

[oneman28]

ADB: Asian Econ Growth To Stay Strong Into 2007

By Cris Larano
Of DOW JONES NEWSWIRES

MANILA (Dow Jones)--Asia's developing economies will sustain robust growth into 2007 as strong domestic demand, regional trade and a steady inflow of investment offset soaring oil prices and moderating growth in the U.S. and China, the Asian Development Bank said Wednesday.



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In its latest Asian Development Outlook, the ADB said gross domestic product for Asia, excluding Japan, will grow by between 6.5% and 6.9% over the next three years.

For 2005, the ADB forecast average GDP growth of 6.5% for developing Asia, up from 6.2% it predicted last September. The upbeat forecast stems from momentum generated by the region last year, when GDP growth averaged 7.3%. That was the fastest growth rate since the 1997-1998 Asian financial crisis.

"The main message for developing Asia is that it will remain robust and resilient," the ADB's chief economist, Ifzal Ali, said at a news conference in Hong Kong.

Countries hit by a devastating tsunami in late December, for instance, will likely emerge quickly from the devastation, the ADB said.

Asia, ex-Japan, will see a "brisk pace" of growth in intra-regional trade as the rest of developing Asia integrates further with China and increasingly with India.

The ADB forecast China's GDP will grow 8.5% in 2005, 8.7% next year and 8.9% in 2007 following growth of 9.5% in 2004, and it expects Asia's fastest-growing economy to achieve a soft landing as a result of government policies aimed at damping sectors viewed as overheated.

High Oil Prices A Risk

Developing Asia, the ADB said in its report, "will remain a preferred investment location, provided that countries can enhance - or at least, keep - their competitive advantage," even as the pace of world economic expansion moderates over the next three years.

Foreign investment in the region is forecast to grow at an annual average of 30% over the three-year period.

Domestic demand will be the main driver of the region's growth; moderating export growth its main damper.

"Domestic market conditions have become stronger over the past two years in most countries, providing some cushion against a potential deterioration in the external environment," the report said.

After growing an average 25.5% in 2004, the ADB expects developing Asia's exports to rise by 13.8% this year and by a more moderate 11% in 2006 and 2007.

Imports, meantime, are expected to rise 16.1% this year, 13.7% in 2006 and 12.2% in 2007.

For 2006 and 2007, ADB forecast GDP growth in developing Asia of 6.6% and 6.9%, respectively.

"Sustaining these rates will hinge on prudent macro management, and especially curbing some of the fiscal deficits that we're seeing in Southeast and South Asia," the ADB said.

Tempering the upbeat message, the ADB warned of risks ahead.

Asian economies - and particularly those in Southeast Asia - are at risk from surging oil prices, epidemics and terror attacks, as well as still-large U.S. external imbalances and the impact of further increases in interest rates by the Federal Reserve.

"Tight oil market conditions are unlikely to ease during the forecast period (2005-2007) as there will be strong demand from the U.S. and China," Ali said.

The current surge in oil prices is due to heavy speculative demand from a global financial market awash with liquidity and many countries building up strategic reserves.

However, as U.S. interest rates rise further, speculative demand for oil should abate, Ali added.

ADB forecast that the price of Brent crude oil will average US$41 a barrel this year, up from US$38.30 last year and US$28.80 last year. It settled Tuesday at US$55.44 a barrel on the International Petroleum Exchange.

The Manila-based development bank has calculated that a $10 increase in oil prices in one year above its assumed price could shave around 0.8 percentage point off growth in Asia, excluding Japan.

Upward Pressure On Asian Currencies

"The risk of global disruption stemming from large external imbalances in the U.S. has been on the radar for some time, but the timing and impact of the inevitable adjustment process remains uncertain," said the ADB, warning that "prior periods of adjustment and resultant weakness in the dollar have proved quite painful for the world economy."

While the U.S. continues to record large current account deficits, developing Asia is producing large current account surpluses. The imbalance is in part responsible for a buildup of foreign exchange reserves in developing Asia of $1.6 trillion in 2004, from $1.3 trillion in 2003.

A large proportion of these reserves has been plowed into U.S. debt securities.

The ADB expects the U.S. dollar to maintain its current strength against the euro unless there is a sudden jolt to financial stability such as a surge in oil prices, higher inflation or an unwinding of Asian central banks' dollar assets.

But "the pressure on developing Asian currencies to appreciate will likely intensify, on the basis of Asia's relatively robust growth outlook and continuing capital inflows to the region," the bank said.

"Against this background, more proactive and concerted regional efforts will be needed to ensure an orderly adjustment among regional currencies in the face of the ongoing global currency movements."

With oil prices high and the dollar weak against Asian currencies, U.S. monetary authorities may be forced to further increase interest rates significantly to curb inflation pressure, the ADB said.

The bank warned that a sharp acceleration in U.S. rates can exert significant influence on global financial markets and undermine investor appetite for taking risks.

It assumes the Federal Reserve will continue its measured pace of monetary tightening in the first half of 2005 and expects the federal funds rate will reach 3.75% by the end of 2005 from 2.75% currently and average 3.1% for the year.

But the Fed isn't likely to stop there due to growing inflation pressures. The ADB assumes an average federal funds target rate of 4.2% in 2006 and 4.4% in 2007.

"Considerable upside risk remains, as inflation could significantly pick up on the closing output gap as well as rising input costs," it said.

ADB's GDP growth forecasts:

2004 2005 2006 2007
Developing Asia 7.3% 6.5% 6.6% 6.9%
East Asia 7.8% 6.7% 7.0% 7.2%
China 9.5% 8.5% 8.7% 8.9%
Hong Kong 8.1% 5.7% 4.1% 5.6%
South Korea 4.6% 4.1% 5.1% 4.9%
Taiwan 5.7% 4.2% 4.5% 4.6%
Southeast Asia 6.3% 5.4% 5.6% 5.9%
Cambodia 6.0% 2.3% 4.1% 4.7%
Indonesia 5.1% 5.5% 6.0% 6.5%
Laos 6.5% 7.0% 6.5% 5.8%
Malaysia 7.1% 5.7% 5.3% 5.8%
Philippines 6.1% 5.0% 5.0% 5.0%
Singapore 8.4% 4.1% 4.5% 4.4%
Thailand 6.1% 5.6% 5.8% 6.0%
Vietnam 7.5% 7.6% 7.6% 7.5%
South Asia 6.4% 6.7% 6.2% 6.9%
Bangladesh 5.5% 5.3% 6.0% 6.0%
India 6.5% 6.9% 6.1% 7.0%
Pakistan 6.4% 7.0% 7.0% 7.5%
Sri Lanka 5.5% 5.2% 5.8% 5.9%
Central Asia 10.4% 8.7% 8.8% 9.2%
The Pacific 2.6% 2.3% 1.4% 2.1%



http://sg.biz.yahoo.com/050406/15/3rq34.html

[Julie]

Thanks to China, I had a 30% price increase on my fencing materials last year. There was a two-month period, I couldn't get full weight pipe to secure a Government facility in my own town. I had to beg, borrow, and travel out of state to get it. Really pissed me off.