During the past year, global steel producer margins have come under severe strain from falls in prices and high input costs. Global output fell more than 20 per cent in the first half of 2009… But recently China has been building both capacity & actual production. The head of India’s largest state-owned steel group said that Chinese production accelerated 15 per cent in the past quarter, beating forecasts of just reaching double-digit growth. “We believed that China would grow, but the growth in the past three to four months has certainly been a surprise. I’m not sure this level can be sustained”…

The rate of increase in the M2 measure of money supply rose to 29.7 per cent, indicating the liquidity led intervention. And yet exports continue to disappoint. November export figures were worse than expected. Exports fell 1.2 per cent compared with the year before, compared with a 13.7 per cent drop announced in October. On a sequential basis, exports were up only 0.7 per cent last month over October, in spite of hopes that restocking by US and European clients would lead to a stronger rebound.

It’s still not clear how long this can continue…




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