Figures are from the World Steel Association. I've been making this chart for the last couple of hours, and the longer I've gone on, the more my heart sinks. One way or another, it's hard to see how this set of trends can end well.
The effects of China's "Beggar-thy-neighbor" policies. See Paul Krugman... http://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/
Jeff Rubin made a lot of hay over that US blip that appears before the recession. High oil prices would bring heavy industry back to american shores. But the effect was swamped....and for now it looks more like a zero-sum situation.
Anyone knows what happens to mothballed capacity in the countries with declining production? Is it easy to quickly re ramp up production locally, if China should experience trouble? Or is this seemingly extreme dependence on a single, historically unproven, supplier for such an important commodity highly destabilizing? Sure looks like an "all the world's eggs in one basket" problem in the making.
Looks like the US could quickly add "some" output, at least back in '05-'06, but it is merely a blip compared to what China now produces.
And what about Chinese consumption? If all that steel simply went to build skyscrapers in China itself, that would be one thing. But the severe output drops in traditional producing countries doesn't support that thesis.
This is an incredible rate of growth for Chinese steel. It does seem consistent with the recent growth of Chinese motor vehicle production that you've shown earlier, but it is still hard to believe. I'd think steel production would more or less track with coal production. Wikipedia shows Chines coal production only about doubling during this period. See http://en.wikipedia.org/wiki/Coal_power_in_China. Is there another data source that could be used to double-check the steel data?
The effects of China's "Beggar-thy-neighbor" policies. See Paul Krugman...
ReplyDeletehttp://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/
Fantastic graph, Stuart!
ReplyDeleteJeff Rubin made a lot of hay over that US blip that appears before the recession. High oil prices would bring heavy industry back to american shores. But the effect was swamped....and for now it looks more like a zero-sum situation.
Holly hockey stick ! Is this even possible ?
ReplyDeleteOn a lighter note: they might have been watching Emmerich's 2012 and are building those boats ;-)
Anyone knows what happens to mothballed capacity in the countries with declining production? Is it easy to quickly re ramp up production locally, if China should experience trouble? Or is this seemingly extreme dependence on a single, historically unproven, supplier for such an important commodity highly destabilizing? Sure looks like an "all the world's eggs in one basket" problem in the making.
ReplyDeleteLooks like the US could quickly add "some" output, at least back in '05-'06, but it is merely a blip compared to what China now produces.
And what about Chinese consumption? If all that steel simply went to build skyscrapers in China itself, that would be one thing. But the severe output drops in traditional producing countries doesn't support that thesis.
@ 九份
ReplyDelete也许你生活和有趣的时代
This is an incredible rate of growth for Chinese steel. It does seem consistent with the recent growth of Chinese motor vehicle production that you've shown earlier, but it is still hard to believe. I'd think steel production would more or less track with coal production. Wikipedia shows Chines coal production only about doubling during this period. See http://en.wikipedia.org/wiki/Coal_power_in_China. Is there another data source that could be used to double-check the steel data?
ReplyDelete