The Inevitable War - Keating goes bang

[1990crow]

I was at the Anzac Day memorial in Geelong where defence minister Richard Marles addressed the community and a high ranking army advisor spoke.
The general theme of the speeches was that our generation was as tough as the ones that had come before us and we are ready to face what comes our way.

It was a remembrance ceremony but you know when someone is talking without specifically mentioning the elephant in the room.

 

[Saint]

Australia's steel exports would be bugger all

In terms of iron ore, not only will China's African supply increase but the end user market will shift from China to central Asia and more importantly Africa. Essentially pushing Australia out of the market due to the lower grade and the transport costs.

Then once marginal producers are cheap, china will pick them off by price dumping like glencore does to zinc producers.



China will need wars if it is to change the status quo on international power. Power changed from continental europe to the US slowly through industrial might and then rapidly through war. This enabled the US to cement its power through international trade and influence in global legal systems. China is seeking to achieve the same outcome and to achieve it, it requires war.

Australian steel exports will pick up.

The next consumer market is not Africa, private investment will still not touch Africa and even if they started now to build Iron Ore capacity, it will be 20 years until they could compete with Australia on volume, let alone price.

Asia is still the next growth market, Indonesia, Phillippines, India, Malaysia, much better prospects than Africa.

Countries, especially in Asia, are expanding their own steel producing to offset risk of being too reliant on China.

Nippon Steel pouring big money into India and Thailand - Asia Times

Nippon Steel and ArcelorMittal, two of the world’s largest steel companies, have turned their attention to India and Thailand amid weakening demand in

asiatimes.com

So there's going to be big fluctuations in price, but China won't be able to control it all.

 

[Festerz]

China's influence in South America is strengthening.

Argentina will start to pay for Chinese imports in yuan rather than dollars, the government announced Wednesday, a measure that aims to relieve the country's dwindling dollar reserves.

In April, it aims to pay around $1 billion of Chinese imports in yuan instead of dollars and thereafter around $790 million of monthly imports will be paid in yuan, a government statement said.

The decision comes as the South American nation battles critical levels in its dollar reserves amid a sharp drop in agricultural exports caused by a historic drought, as well as political uncertainty ahead of elections this year.

In November last year, Argentina expanded a currency swap with China by $5 billion , seeking to strengthen Argentina's international reserves.

Argentina to pay for Chinese imports in yuan rather than dollars

Argentina will start to pay for Chinese imports in yuan rather than dollars, the government announced Wednesday, a measure that aims to relieve the country's dwindling dollar reserves.

www.reuters.com

And the Chinese Yuan has overtaken the US dollar as most-used currency in China's cross-border transactions for the first time in history.

The yuan was used in 48.4% of all cross-border transactions, while the dollar's share declined to 46.7% from 48.6% a month earlier.

The volume of cross-border transactions covers both the current and capital accounts.

China has long been promoting the use of yuan to settle cross-border trades as part of an efforts to internationalise the use of its currency. But it is starting from a long way back. Data from SWIFT showed that the yuan's share of global currency transactions for trade finance rose to 4.5% in March, while the dollar accounted for 83.71%

Bloomberg - Are you a robot?

www.bloomberg.com

 

[Saint]

China's influence in South America is strengthening.

Argentina will start to pay for Chinese imports in yuan rather than dollars, the government announced Wednesday, a measure that aims to relieve the country's dwindling dollar reserves.

In April, it aims to pay around $1 billion of Chinese imports in yuan instead of dollars and thereafter around $790 million of monthly imports will be paid in yuan, a government statement said.

The decision comes as the South American nation battles critical levels in its dollar reserves amid a sharp drop in agricultural exports caused by a historic drought, as well as political uncertainty ahead of elections this year.

In November last year, Argentina expanded a currency swap with China by $5 billion , seeking to strengthen Argentina's international reserves.

Argentina to pay for Chinese imports in yuan rather than dollars

Argentina will start to pay for Chinese imports in yuan rather than dollars, the government announced Wednesday, a measure that aims to relieve the country's dwindling dollar reserves.

www.reuters.com

Don't know if you know anything about its history, but Argentina aint the greatest manager of currencies. If China is willing to participate in these currency swaps, it's perhaps just so they can be owed nearly as much as other Argentine Bond-holders.

I bet those existing bond-holders can't wait to be paid in Yuan....

 

[QuietB]

Don't know if you know anything about its history, but Argentina aint the greatest manager of currencies. If China is willing to participate in these currency swaps, it's perhaps just so they can be owed nearly as much as other Argentine Bond-holders.

I bet those existing bond-holders can't wait to be paid in Yuan....

Isn’t the Yuan pegged to the USD?

 

[Saint]

Isn’t the Yuan pegged to the USD?

Yeah, and the Argentine Peso is also pegged to the USD. But all that does is create two currency exchanges. The official (pegged) one, and the actual one.

One of the big reasons people in China don't like holding Chinese currency, it has a history of sharp and regular devaluations.

 

[schneebly111]

And here’s what all this war scaremongering gets you:

Brisbane man shouts racist tirade, strikes couple with crutches on Anzac Day

A group of people were attacked by a man who insulted them while they were fishing at Newstead.

www.brisbanetimes.com.au

A tired old racist, fuelled up on media scaremongering and probably booze at an Anzac Day piss up, taking his anger out in anyone who looks Asian, Chinese or not.

I mean everyone one on this thread is talking about war with Asia, but just shy of 20% of the Australian population, and 30-35% on some of our cities are of Asian descent. They are now getting abused because of this conflict talk, but if push really came to shove and a hot war broke out do you think that 20% of this country is going to fall in behind a mostly Anglo Saxon military?

Some may but a very large proportion of that community aren’t going to take the fact this country is fighting an Asian neighbour very well at all. The social unrest that may lead to, and is leading to with the media scaremongering, is something a lot of people on this thread and who are pushing for war haven’t fully realised will happen and it’s consequences on society.

 

[Power Raid]

You are seriously selling these African countries for mugs.

Notwithstanding the inherent sovereign risk, depending on region, it is inevitable that a lot of African trade will be nationalised one way or another.

yes nationalisation is a real concern for western investment. however if you are china and have a military to back up your investment, nationalisation won't happen.

for the nationalisation of western assets, china will be standing there not only encouraging it but picking up the pieces

Tanzania, Mozambique, the large port nations on east coast are taking significant stakes in foreign mining companies already. You think China will just pick these companies off? I wouldn't be surprised if they become a base/precious metals version of OPEC in the next decade.

yes of course china will, that's why nations are strengthening their FIRB rules to mitigate this in their own countries. After all if Glencore can, why wouldn't china. Even BHP tried to pick off rio during the dark days and FMG tried to pick off Vale.

The bigger threat is china not just controlling commodities but entire countries. Again this is already well discussed.

Also, what makes you think Aussie IO is all the b grade stuff? There are some very significant magnetite deposits already scoped in Australia with assumably many more to come.

magnetite is by definition NOT b grade but better termed as shit. Australia has no competitive advantage over magnetite as they are often sub 40% iron ore (60% waste), harder then overseas ore bodies, our cost of energy is high, our logistics to markets are high.

Meanwhile 67% is the standard in west africa.

further the customer base is shifting from north asia to central asia (including the sub continent) and africa.

 

[RandB]

magnetite is by definition NOT b grade but better termed as s**t. Australia has no competitive advantage over magnetite as they are often sub 40% iron ore (60% waste), harder then overseas ore bodies, our cost of energy is high, our logistics to markets are high.

Meanwhile 67% is the standard in west africa.

further the customer base is shifting from north asia to central asia (including the sub continent) and africa.

Significnt oz deposits of 70% exist. Getting it out of the ground is the issue but it will happen.

Re: China they are having a hard enough time just collecting on their loans which many countries are considering as grants.

 

[Power Raid]

Significnt oz deposits of 70% exist. Getting it out of the ground is the issue but it will happen.

Re: China they are having a hard enough time just collecting on their loans which many countries are considering as grants.

I would love to hear about these 70% iron ore deposits, especially 70% magnetite. My punt is you have been mislead about the ore grade vs beneficiation.

and mining is easy but the grinding is expensive as Australia's magnetite is hard, especially as you head in a westerly direction.

and no the loans are not to be repaid in cash but they are "toilet notes" which are designed for financial slavery

 

[RandB]

I would love to hear about these 70% iron ore deposits, especially 70% magnetite. My punt is you have been mislead about the ore grade vs beneficiation.

and no the loans are not to be repaid in cash but they are "toilet notes" which are designed for financial slavery

HIO is one small cap example. 480mt.+ Company fundamentals are not good but the OD is. There are similar small caps to this.

Debt trap diplomacy has worked, yes, but countries are waking up to this now and simply refusing to pay without recourse.

Dealing with corruptible governments, particularly central and west coast of Africa is not all plain sailing.

 

[Saint]

yes nationalisation is a real concern for western investment. however if you are china and have a military to back up your investment, nationalisation won't happen.

for the nationalisation of western assets, china will be standing there not only encouraging it but picking up the pieces



yes of course china will, that's why nations are strengthening their FIRB rules to mitigate this in their own countries. After all if Glencore can, why wouldn't china. Even BHP tried to pick off rio during the dark days and FMG tried to pick off Vale.

The bigger threat is china not just controlling commodities but entire countries. Again this is already well discussed.



magnetite is by definition NOT b grade but better termed as s**t. Australia has no competitive advantage over magnetite as they are often sub 40% iron ore (60% waste), harder then overseas ore bodies, our cost of energy is high, our logistics to markets are high.

Meanwhile 67% is the standard in west africa.

further the customer base is shifting from north asia to central asia (including the sub continent) and africa.

Well you're both kind of wrong/right.

Magnetite is proposed to be the future. It takes additional processing, which is relatively easy, but then means the creation of Iron from the ore is more efficient (cost and emissions).

Hematite can just be dug up, crushed, screened and shipped, but at the Smelter it produces more emissions and requires more energy. So people are moving away from it in the future, but it's been the Australian Iron Ore cash cow for a long time now. Just dig it up and ship it.

Magnetite is taking a greater investment to process before shipping a concentrate (or creating Iron/steel like they do in Whyalla).



Iron Bridge, Fortescue's project to ship Magnetite out of the Pilbara shows that the Pilbara will continue to produce Iron Ore to China at lowest cost and highest grade for a long time.

It's tricky to determine overall ore quantities by country, but the sheer size of Australia's deposits of both means we probably would like Hematite to continue for a while longer than the environment would want us to. (it also requires more coking coal....)

 

[Power Raid]

Well you're both kind of wrong/right.

Magnetite is proposed to be the future. It takes additional processing, which is relatively easy, but then means the creation of Iron from the ore is more efficient (cost and emissions).

Hematite can just be dug up, crushed, screened and shipped, but at the Smelter it produces more emissions and requires more energy. So people are moving away from it in the future, but it's been the Australian Iron Ore cash cow for a long time now. Just dig it up and ship it.

Magnetite is taking a greater investment to process before shipping a concentrate (or creating Iron/steel like they do in Whyalla).



Iron Bridge, Fortescue's project to ship Magnetite out of the Pilbara shows that the Pilbara will continue to produce Iron Ore to China at lowest cost and highest grade for a long time.

It's tricky to determine overall ore quantities by country, but the sheer size of Australia's deposits of both means we probably would like Hematite to continue for a while longer than the environment would want us to. (it also requires more coking coal....)

1) haematite is mined for export markets over magnetite as it is lower cost and strategic for the end user nation
2) how will Australia compete in magnetite long term if china has loads of their own low grade magnetite
3) how will australia compete long term exporting magnetite to african markets when they have high grade haematite
4) even india has loads of magnetite

magnetite is the future but don't confuse that to mean an opportunity for australia. rather it is the point of an even playing field where the winners will be low energy prices, low energy magnetite (soft) and nations where consumption is strategic for their development

fortecue sacked their magnetite team due to the cost blow outs and time. Watch this space for more colour.

 

[Aristotle Pickett]

Seems as if an upcoming war with China is a given these days. Whats your opinion? When does it start? Whats the outcome?

How ridiculous, there will never be a war with China.

 

[Power Raid]

How ridiculous, there will never be a war with China.

why do you believe this? given the efforts in the past to take taiwan by force, indian conflicts, tibet, the korean war and vietnam war.

and more importantly the powers before such as france, uk, us, japan, germany etc all flexed their muscle when they were the top dog in their jurisdiction or globally. why would china be any different, especially given they have stated war is their intent and the fact they have built the capability to deliver on that intent? do you feel they have invested time and money in the war machine for giggles?

 

[Aristotle Pickett]

why do you believe this? given the efforts in the past to take taiwan by force, indian conflicts, tibet, the korean war and vietnam war.

and more importantly the powers before such as france, uk, us, japan, germany etc all flexed their muscle when they were the top dog in their jurisdiction or globally. why would china be any different, especially given they have stated war is their intent and the fact they have built the capability to deliver on that intent? do you feel they have invested time and money in the war machine for giggles?

You're reaching to find good reasons. China does not start wars, that is America's thing.

 

[sdfc]

You're reaching to find good reasons. China does not start wars, that is America's thing.

China has a history of expansion, the US just has the MIC to support.

 

[QuietB]

why do you believe this? given the efforts in the past to take taiwan by force, indian conflicts, tibet, the korean war and vietnam war.

and more importantly the powers before such as france, uk, us, japan, germany etc all flexed their muscle when they were the top dog in their jurisdiction or globally. why would china be any different, especially given they have stated war is their intent and the fact they have built the capability to deliver on that intent? do you feel they have invested time and money in the war machine for giggles?

When did the bolded bit happen

 

[Aristotle Pickett]

China has a history of expansion, the US just has the MIC to support.

China's only sin is that they had the temerity to become a bigger economic power than America.

 

[sdfc]

China's only sin is that they had the temerity to become a bigger economic power than America.

No they're a belligerent power that have taken possession of a major international shipping lane and are directly threatening a neighbour. Xi Jinping isn't really Winnie the Pooh you know.

 

[Aristotle Pickett]

No they're a belligerent power that have taken possession of a major international shipping lane and are directly threatening a neighbour. Xi Jinping isn't really Winnie the Pooh you know.

Hardly belligerent considering they are the biggest economy in the world with one of the biggest populations.
It's all bluster and hawkish fearmongering. America doesn't rule the world anymore. Any view that Xi is an evil dictator is ridiculous, they have pulled 300 million people out of poverty with their economic reforms.
People like Andrew Hastie and Murdoch journalists are just xenophobic racists. Others are people with links to arms companies eg the jerks who wrote that 'red alert war in 3 years' crap recently.

 

[QuietB]

No they're a belligerent power that have taken possession of a major international shipping lane and are directly threatening a neighbour. Xi Jinping isn't really Winnie the Pooh you know.

When did the bolded happen?

 

[sdfc]

Hardly belligerent considering they are the biggest economy in the world with one of the biggest populations.

Why does that give China immunity?

It's all bluster and hawkish fearmongering. America doesn't rule the world anymore. Any view that Xi is an evil dictator is ridiculous, they have pulled 300 million people out of poverty with their economic reforms.

There are no black hats and white hats. They also run "re-education" camps.

People like Andrew Hastie and Murdoch journalists are just xenophobic racists. Others are people with links to arms companies eg the jerks who wrote that 'red alert war in 3 years' crap recently.

The hawkish rhetoric is ridiculous and dangerous.

 

[sdfc]

When did the bolded happen?

South China Sea.

 

[Ohitsthatguy]

How ridiculous, there will never be a war with China.

Because the US keep their totalitarian regime in check

The US is ****ed but I'll take their form of government over China's totalitarianism