56 thoughts on “Monday Message Board”

1. Ikonoclast.
   1. Yes, some form of real resource accounting is called for. As is apparent from the link I provided, I am not the first nor the only person who is of this opinion. As is also apparent from Friday for Future and other mass movements, young people are aware of the urgency of the problem. As you have said in one of your posts above, human progress seems to depend on the relative short period of time of a generation because only the minds of the young are capable of new thoughts (with some exceptions of course!). My reading of your posts seems to indicate a sense of frustration on your part with the lack of action. But you have provided a reasonable explanation for the time it takes to bring about change! As for technical aspects, IMHO macroeconomic mental models (including MMT of whatever version) are deeply imbedded in so many minds, both those educated in economics and those who report on or discuss economic matters; these models are part of an intellectual culture, if you like. It will take time for new mental models to develop and become diffused within the society at large. Without this diffusion of ideas among people and their support for the implementation of new ideas it is difficult to hold on to democracy, IMO. I am very confident in saying there are many thousands of people all over the world working on how to better integrate scientific knowledge and economics; there are technical questions requiring technical solutions and there are policy questions and, and, and ….. each one of us can only try to make little contributions based on our individual knowledge and experience. Isn’t it good to be alive in this exiting time?

   2. The translation looks o.k. to me. Thanks for this – I was too lazy, I admit.

2. Before the sun soon sets in the west Australia should vastly increase all revenue extraction from iron ore exports – currently the one very good exploitable thing going, but not for much longer. Make hay while the sun still shines… maybe invest the short term windfall available in education and aged care?

   The article drawn on below about Vale’s huge Brazil mine and shipping upgrades for the Chinese market also mentions Simandou, Guinea. That is as rich an iron ore deposit as it gets, and it will not be long now before Chinalco and partners commence exporting back to China from there – probably in the Valemax 400,000 deadweight tonnes (DWT) ships it may lease or have built.

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   China’s appetite for iron ore prompts Brazilian miner Vale to explore new deep water port

   Vale eyes a deep-berth port in Brazil to use more of its massive Valemax ships after China last month approved four new ports to host them

   China wants to diversify its iron ore sources to ensure supply and keep prices down as domestic demand surges for steel amid economic recovery

   https://www.scmp.com/economy/global-economy/article/3095851/brazilian-miner-vale-looks-satisfy-chinas-appetite-iron-ore

   …In June, China imported record amounts of iron ore
   to satisfy a sharp increase in demand for steel products to supply the country’s infrastructure and property building boom
   . About 60 per cent of that supply came from Australia, pushing up the price of ore to US$110 per tonne in July – a level not seen since August 2019.

   …Along with Vale’s improved second-quarter results revealed last week, and its renewed commitment to forge ahead with an expansion of production at its northern mines, Ponta da Madeira’s capacity shortcomings and China’s four new deep-berth ports could be the game-changer, GPM executive director Paulo Salvador said.

   …“Vale’s Valemax [massive ore carriers] were Brazil’s creation to bring its mines closer to China. So, the approvals of the four deep berths in China are a vote of confidence in [Vale’s] ability to supply quality iron ore. We think it is important for China to have diversified suppliers,” Salvador said.

   “We think it would be in China’s interests to have options other than [mainly] Australian iron ore, and to become less dependent on them – a situation which could increase [risks] such as high costs and uncertainties in supplies.”

   China’s approval of four new deep-berth ports two weeks ago to accommodate Chinamax-standard “very large ore carriers”, which can carry up to 400,000 deadweight tonnes (DWT) of ore – an area which Vale dominates with its Valemax ships – was a crucial signal from China that Brazilian deep-berth ports such as Alcantara could support a larger iron trade between the two countries, Salvador added.

   …“China imports 900 million tonnes a year, and Brazil is not delivering what it is supposed to, so iron ore prices have gone up a lot, about 40 per cent, and present huge costs to Chinese steel mills,” he said. “The Chinese demand is so great they are even considering risky projects in West Africa such as Simandou [in southeastern Guinea].”

   Bigger Valemax capacity meant lower costs and shorter shipment times for the longer routes between Brazil and China, making Vale ore competitive with that of Australian miners, who mainly use smaller Capesize vessels – between 250,000 and 300,000 DWT – to ship the ore the shorter distance to China.

   …The approval of the four deep berths will not only help China secure more supply, it will also diversify its supply sources to include greater imports from more “stable markets” such as Brazil and Africa over Australia, which until now has benefited from its closer proximity with China, according to analysts.
   China and Australia
   have been locked in a bilateral dispute since April, when Canberra called for an international investigation into the origins of the coronavirus.

   The Brazilian supply is an important complement to Australian iron ore for China, particularly given that Australia’s production is at full capacity, said Erik Hedborg, lead iron ore analyst for commodity market consultancy CRU Group.

   —

   What’s the Slomo and Depressionberg duo gonna do?

3. China’s new Yantai deep water port receives first iron ore mega ship from Brazil’s Vale
   Su-Lin Tan Published: 4:30am, 7 Aug, 2020

   https://www.scmp.com/economy/global-economy/article/3096350/chinas-new-yantai-deep-water-port-receives-first-iron-ore

   Brazilian miner Vale docked a massive Valemax ship at the Port of Yantai on Wednesday, as China seeks to diversify sources of iron ore

   Shipments from Brazil will not challenge Australian miners in the short-run, but show China is looking to secure a reliable long-term supply

   …China has in recent weeks approved four new deep water ports
   , bringing the national total to 11, which will help cater for rising demand for steel and iron ore in the years ahead.

4. Just watching the Champion Leauge final and i´m noticiting that i enjoy to watch football games more without a yelling audicence.

5. Iron ore prices have hit a high currently. That doesn’t tell us what the future holds of course.

   https://www.cnbc.com/2020/08/21/iron-ore-prices-hit-multi-year-highs-on-china-infrastructure-investment.html

   Larger trends need to be observed. China appears to be following the strategy of dominating world manufacture. Steel is just one example.

   “Don’t Let China Steal Your Steel Industry
   Beijing is rapidly becoming the dominant player in an industry vital to defense and technology companies. If the United States and Europe aren’t careful, they will become dependent.
   By Elisabeth Braw.”

   “In Indonesia, a vast new stainless-steel plant can produce an impressive 3 million metric tons of the shiny metal each year. And the plant isn’t even an Indonesian venture. It was built by a Chinese market giant that is using the country to undermine Western competition. Those who think stainless steel is a fringe sector should think again. The unglamorous metal is vital to everything from cutlery to aircraft, tankers, and surgical instruments. China’s sneaking takeover of the global stainless-steel market will put other sectors at risk, too.

   The Indonesian plant, owned and operated by the Chinese stainless-steel firm Tsingshan, opened in 2017. The choice of location was no coincidence: Indonesia has the world’s largest reserves of nickel, a key component of stainless steel. More than two-thirds of the world’s nickel is used to make stainless steel. (Regular steel consists almost exclusively of iron, while stainless steel also contains nickel and chromium.) And the plant’s construction was supported by the Chinese government; indeed, it falls within China’s global Belt and Road Initiative.

   Then, when the plant had operated for less than two years, the Indonesian government suddenly announced that it would ban exports of nickel starting in January of this year. Predictably, the move caused global nickel prices to skyrocket. But thanks to its Indonesian plant, Tsingshan is shielded from the nickel hike.”

   China leads the world in crude steel production by a wide margin. It makes over half of the world’s crude steel. It makes over ten times more crude steel than the US does. It makes over eight times as much as India, it’s closest competitor. Have a look at worldsteel dot org.

   The world is beginning to understand it cannot let one nation dominate world heavy and elaborate manufactures. That leads to a disastrous dependence on the lead manufacturing nation.

   The bigger picture is that current world production (of just about everything) is unsustainable in any case. The race to dominance is a race over the cliff. Quite a conundrum.

6. Collapsed long term global iron ore pricing would shove the balance of payments towards a cliff here quite soon. Maybe renewables powered mining, transport, and lots of green steelmaking and manufactures made here from that for export can become a safety net? Though even there the great trouble is it’s a net placed somewhere down the cliff, and not a safety barrier set well back from a dangerous cliff edge… What does the lazy fast buck oligarchy here actually have in store for us?