A joint report from an Australian government department and Westpac
- China Resources Quarterly is a collaborative research product prepared by the Department of Industry, Innovation and Science and Westpac Bank
November report released today
Main points (bolding mine):
- Commodity producers are likely to benefit from rallies in various commodity prices and continued strong prospects in the vast Chinese commodity market
- The report shows an important pickup in Chinese economic conditions since August, with GDP growth stabilising and property prices rallying
- Further growth will depend on flow-through of stronger conditions to construction and consumer spending
- Some key commodities including iron ore and coal have also recorded price rallies over 2016, although this may reverse as supply of these commodities continues to rise in Australia and elsewhere
- Coal and iron ore producers in Australia have been successful at lowering costs and improving their capacity, helping to insulate themselves from any potential downturn in prices. However, producers of other commodities may still have work ahead to prepare themselves for a tougher market.
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That "Coal and iron ore producers in Australia have been successful at lowering costs and improving their capacity, helping to insulate themselves from any potential downturn in prices" is an optimistic thought.
It does smell a bit like "its different this time" though .... Be wary. If Australian producers have been successful at lowering costs then I can't imagine other suppliers elsewhere haven't been hard at work on this front also.
