What Chinese steel exports mean for the world

There's a consensus that the commodity boom will last for years, but events in the stell market suggest it might not.

"It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife." The opening sentence of Pride and Prejudice, by Jane Austen, is one of the most famous opening lines in British literature. It is justly famous precisely because we suspect that this so-called truth, as with so many others that are "universally acknowledged", is nothing of the sort. Even in 1813, Austen knew her audience would understand that consensus does not bestow veracity.

In 1999, for example, it was a truth universally acknowledged that, as the internet would irrevocably alter our lives, dotcom stocks could defy previous rules of value. Today, it is a truth universally acknowledged that voracious import demand from China is sucking in raw materials and is driving commodity prices through the roof in the process. As Philip Coggan writes in the FT: "China's economy is growing at 10% a year and its influence as a huge consumer of commodities, pushing prices substantially higher, is seen all over the world."

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James Ferguson qualified with an MA (Hons) in economics from Edinburgh University in 1985. For the last 21 years he has had a high-powered career in institutional stock broking, specialising in equities, working for Nomura, Robert Fleming, SBC Warburg, Dresdner Kleinwort Wasserstein and Mitsubishi Securities.