Finally.
China's rare earth shipment strike (?) is now causing a rippling effect through the global demand for rare earths, which are in a key component for all computer/electronic related accessories, namely lithium based batteries, LCD/LED screens, navigation systems for missiles etc. As prices will start to spike on all software/electronic products.
The question is: Why has China done this? The answer: Why not? The US Treasury and government and Federal Reserve think they can arrogantly devalue the US Dollar, while verbally attacking China to revalue there YUAN, is the epitome of market hypocrisy.
China is saying fuck you, 'we cut shipments of rare earths to Japan and Japan released the Chinese fishing captain in hrs, now USA back the fuck off' (from Mandarin :) )
Same tactic bigger 'enemy', China are exerting economic/strategic power; you have to respect this if you provoke them. The US will just have to take the pain, or counter strike. But they will counter strike. Which will be? Obama tariffs overdrive on ALL Chinese imports to the US before the mid-yr elections.
Trade war on, geo-political tensions up. Shit is collecting near the fan...
From Bloomberg 21/10/2010
"Rare-earth prices have jumped as Chinese export quotas crimped worldwide supplies for the elements used in the manufacture of disk drives, wind turbines and smart bombs.
Prices have climbed sevenfold in the last six months for cerium oxide, which is used for polishing semiconductors, and other elements have more than doubled, according to Metal-Pages Ltd. in London, which tracks rare-earth prices.
Actions by China, which produces more than 90 percent of the world’s rare earths, have drawn criticism from U.S. lawmakers and officials in Japan and Germany. China reduced its second-half export quota for the minerals by 72 percent in July. It is now further restricting exports, according to industry participants.
“Materials are still being held up in customs and shipments are delayed,” Jeff Green, president of J.A. Green & Company LLC in Washington, who represents miners and users of the elements, said in a telephone interview yesterday. “Many believe rare-earth quotas for the second half of 2010 are exhausted, leaving materials unavailable for sale.”
President Barack Obama’s spokesman said the National Security Council staff is looking into reports that China is blocking shipments.“They’ve seen the reports,” press secretary Robert Gibbs told reporters traveling with Obama on a West Coast campaign trip.“They’re looking into them but don’t have anything they could confirm about those reports.”
China’s Comments
China said the quota reduction was needed in order to shut polluting mines and still be able to meet domestic demand. It will “continue to supply rare earth to the world” while maintaining restrictions “to protect exhaustible resources and ensure sustainable development,” the Commerce Ministry said in a statement yesterday.
Contributing to the rise in prices is an expectation of further restrictions. China will probably tighten export controls on rare earths next year, Shigeo Nakamura, president of Advanced Material Japan Corp., said at a conference in China yesterday.
Rare earths are a group of 17 chemically similar metallic elements, such as lanthanum, cerium, neodymium and europium. The elements are used in radar, high-powered magnets, mini-hard drives in laptop computers, catalytic converters for vehicles, electric-car batteries and wind turbines.
“It’s pretty frightening that there may be a gap where U.S. industry pays an extraordinary price,” U.S. Representative Mike Coffman, a Colorado Republican, said in an interview. He said U.S. rare-earth mining isn’t likely to resume until at least late 2012 at a mine in Mountain Pass, California.
‘Unified Front’
“The administration needs to join with other countries and have a unified front to tell China this is not appropriate,” he said. "
Showing posts with label asian trade war. Show all posts
Showing posts with label asian trade war. Show all posts
Wednesday, October 20, 2010
Thursday, September 30, 2010
Inches away from an Asian/US trade war (update 6) -China's PMI up 53.1%, South Korea's PMI down 48.8% (contraction)
As the rest of Asia contracts and China expands via a re-pump of cheap products swamping the world + China's housing bubble (the mother of all bubbles)
You can guarantee that Japan and South Korea will devalue the currencies like no tomorrow and the US will' go all out war' with trade tariffs.
You can guarantee that Japan and South Korea will devalue the currencies like no tomorrow and the US will' go all out war' with trade tariffs.
Sunday, September 26, 2010
Inches away from an Asian/US trade war (update 5) - Tarrifs on
"Sentiment remains bullish in the domestic market which has pushed up the Hang Seng Index up by around 250 points so far this morning. However, on the interest rate front, a cautious approach prevails as China has issued a final ruling to collect anti-dumping tariffs over US chicken products ranging from 50.3% to 105.4%. The ruling comes two days after the US House Ways and Means Committee backed a bill to allow US companies to seek tariffs on Chinese imports if China doesn’t allow the Yuan to appreciate to an appropriate value. The US House will vote on the bill Wednesday. Traders are worried about a full blown trade war. Ahead of the National Day Golden Week in China starting this Friday, players are hesitated to open new positions"
Watch high yield positions
Watch high yield positions
Wednesday, September 22, 2010
Inches away from an Asian trade war (update 4) - first shots fired China/Japan embargo (rare earths)
If confirmed it would be the start of a full scale trade war that will draw the US in (re: tariffs on most Chinese imported goods pre: November 2010 elections). The smoking gun is the recent, and disturbing, embargo on rare earth shipments to Japan. Of course this will escalate the geo political tensions between China and Japan as discussed in Major war/conflict cycle commencing? (update 5) Japan/China
This will also be an excuse to not revalue the Yuan higher and the Yen will weaken further, as Japan will go all out to slam the Yen down further. The whole devaluation war (currency protectionism) will cause Asia to devalue all their own currencies. The USD will be bid, with the Fed putting through a second qualitative easing but without US government fiscal stimulus - the USD may not fall as hard as assumed on QEII). But rather a trade war with China, namely high taxed imported steel will be the US government response on a slowing economy.
NYT Sept 23rd 2010
HONG KONG — Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has placed a trade embargo on all exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.
*Didymium oxide is a rare earth mineral used in delicate electronics.
Related
*An engine of a Toyota Prius. Each Prius uses at least two pounds of rare earth elements in its various parts.
Chinese customs officials are halting all shipments to Japan of so-called rare earth elements, industry officials said on Thursday morning.
On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese coast guard vessels about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.
A Chinese commerce ministry official declined on Thursday to discuss the country’s trade policy on rare earths, saying only that Mr. Wen’s comments remained the Chinese government’s position.
China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound.
Dudley Kingsnorth, the executive director of the Industrial Minerals Company of Australia, a rare earth consulting company, said that several executives in the rare earths industry had already expressed worries to him about the export ban. The executives have been told that the initial ban lasts through the end of the month, and that the Chinese government will reassess then whether to extend the ban if the fishing captain still has not been released, Mr. Kingsnorth said.
This will also be an excuse to not revalue the Yuan higher and the Yen will weaken further, as Japan will go all out to slam the Yen down further. The whole devaluation war (currency protectionism) will cause Asia to devalue all their own currencies. The USD will be bid, with the Fed putting through a second qualitative easing but without US government fiscal stimulus - the USD may not fall as hard as assumed on QEII). But rather a trade war with China, namely high taxed imported steel will be the US government response on a slowing economy.
NYT Sept 23rd 2010
HONG KONG — Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has placed a trade embargo on all exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.
*Didymium oxide is a rare earth mineral used in delicate electronics.
Related
*An engine of a Toyota Prius. Each Prius uses at least two pounds of rare earth elements in its various parts.
Chinese customs officials are halting all shipments to Japan of so-called rare earth elements, industry officials said on Thursday morning.
On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese coast guard vessels about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.
A Chinese commerce ministry official declined on Thursday to discuss the country’s trade policy on rare earths, saying only that Mr. Wen’s comments remained the Chinese government’s position.
China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound.
Dudley Kingsnorth, the executive director of the Industrial Minerals Company of Australia, a rare earth consulting company, said that several executives in the rare earths industry had already expressed worries to him about the export ban. The executives have been told that the initial ban lasts through the end of the month, and that the Chinese government will reassess then whether to extend the ban if the fishing captain still has not been released, Mr. Kingsnorth said.
Thursday, September 16, 2010
Inches away from an Asian trade war (update 3)
Recent gold buying is a very good indicator that the market is hedging risk aversion at the same time with risk 'on'
Despite Japan's YEN intervention, which should have a larger reverberation that should be felt around about now (chaos theory: y'know butterfly effect, cause and effect, fuck with something[that shouldn't be fucked) and it ends up fucking worst...you get the drift), the global trade war should be ready to start, which Asia baiting and US shooting. A protectionist/trade war may end up moving into geopolitical tensions at some-point. Regardless the consequences for a trade war with Asia will decimate valuations and insurance spreads should widen (CDS's).
It's all a joke refer:
DOW JONES NEWSWIRES SHANGHAI (Dow Jones)--The yuan ended its six-day rally against the U.S. dollar on Friday, following a less aggressive effort by China's central bank to guide its currency higher after the completion of the closely watched U.S. Congressional hearings on Beijing's exchange-rate policy. Traders and analysts said Beijing may have little desire to tolerate much more yuan appreciation in the near term given the currency's 1.0% gain against the dollar in the previous six trading sessions, even though international pressure for a higher yuan will likely stay strong. U.S. Treasury Secretary Timothy Geithner's apparent effort to stake out a middle ground during his testimony at the Congressional hearing overnight also took some pressure off the yuan, traders said. At 0515 GMT, the dollar was at CNY6.7265 on the over-the-counter market, up from CNY6.7248 at Thursday's close. In the offshore market, one-year dollar-yuan nondeliverable forwards slipped slightly to 6.6340/6.6380 from 6.6390/6.6430 late Thursday. The yuan's decline came after the People's Bank of China set the dollar/yuan central parity at 6.7172, a fresh record low for the daily reference rate but down only a touch from 6.7181 Thursday. "The central parity was certainly higher than expected and so demand for the dollar rose this morning," said a Shanghai-based trader at an Asian bank. "Our take is that the dollar-yuan may be nearing a significant rebound," he added. "The U.S. Congressional hearing is over. And we don't think the yuan will continue to appreciate sharply in the near term." Facing hostile Congressional questioning, Geithner pressed China to significantly boost the value of its currency but also tried to fend off lawmakers who want the U.S. to take harsher action against Beijing's policies, indicating the Obama administration remains reluctant to formally label China a currency manipulator under U.S. law. While the U.S. feels the yuan is "significantly undervalued," a formal designation would "not be a particularly effective tool" for achieving U.S. goals, he said. "The comment yesterday was actually quite balanced," said a foreign-exchange strategist at a U.S. bank in Singapore. "I think it's the right way to engage China, because the Obama administration is quite aware that if you put too much pressure on them it will only become counter-productive." But he said China is unlikely to maintain the recent pace of yuan appreciation, adding his bank has left its prediction that the dollar could fall to CNY6.60 by year-end unchanged. Donald Straszheim, head of China research at Los Angeles-based ISI Group, said China doesn't believe its economic situation warrants much yuan appreciation. "Beijing officialdom is reasonably comfortable with the growth and inflation outlook domestically now," Straszheim said. "So moving the currency for its short-term effect on economic activity within China is not the immediate motivation." Analysts said the possibility remains for the U.S. Congress to take punitive action against China on its currency policy in coming weeks. A series of high-level international meetings later this year could still put the spotlight on the yuan valuation issue, among them the UN General Assembly in New York next week--when China Premier Wen Jiabao plans to meet U.S. President Barack Obama, and the Group of 20 leading world economies summit meeting in November.
Despite Japan's YEN intervention, which should have a larger reverberation that should be felt around about now (chaos theory: y'know butterfly effect, cause and effect, fuck with something[that shouldn't be fucked) and it ends up fucking worst...you get the drift), the global trade war should be ready to start, which Asia baiting and US shooting. A protectionist/trade war may end up moving into geopolitical tensions at some-point. Regardless the consequences for a trade war with Asia will decimate valuations and insurance spreads should widen (CDS's).
It's all a joke refer:
DOW JONES NEWSWIRES SHANGHAI (Dow Jones)--The yuan ended its six-day rally against the U.S. dollar on Friday, following a less aggressive effort by China's central bank to guide its currency higher after the completion of the closely watched U.S. Congressional hearings on Beijing's exchange-rate policy. Traders and analysts said Beijing may have little desire to tolerate much more yuan appreciation in the near term given the currency's 1.0% gain against the dollar in the previous six trading sessions, even though international pressure for a higher yuan will likely stay strong. U.S. Treasury Secretary Timothy Geithner's apparent effort to stake out a middle ground during his testimony at the Congressional hearing overnight also took some pressure off the yuan, traders said. At 0515 GMT, the dollar was at CNY6.7265 on the over-the-counter market, up from CNY6.7248 at Thursday's close. In the offshore market, one-year dollar-yuan nondeliverable forwards slipped slightly to 6.6340/6.6380 from 6.6390/6.6430 late Thursday. The yuan's decline came after the People's Bank of China set the dollar/yuan central parity at 6.7172, a fresh record low for the daily reference rate but down only a touch from 6.7181 Thursday. "The central parity was certainly higher than expected and so demand for the dollar rose this morning," said a Shanghai-based trader at an Asian bank. "Our take is that the dollar-yuan may be nearing a significant rebound," he added. "The U.S. Congressional hearing is over. And we don't think the yuan will continue to appreciate sharply in the near term." Facing hostile Congressional questioning, Geithner pressed China to significantly boost the value of its currency but also tried to fend off lawmakers who want the U.S. to take harsher action against Beijing's policies, indicating the Obama administration remains reluctant to formally label China a currency manipulator under U.S. law. While the U.S. feels the yuan is "significantly undervalued," a formal designation would "not be a particularly effective tool" for achieving U.S. goals, he said. "The comment yesterday was actually quite balanced," said a foreign-exchange strategist at a U.S. bank in Singapore. "I think it's the right way to engage China, because the Obama administration is quite aware that if you put too much pressure on them it will only become counter-productive." But he said China is unlikely to maintain the recent pace of yuan appreciation, adding his bank has left its prediction that the dollar could fall to CNY6.60 by year-end unchanged. Donald Straszheim, head of China research at Los Angeles-based ISI Group, said China doesn't believe its economic situation warrants much yuan appreciation. "Beijing officialdom is reasonably comfortable with the growth and inflation outlook domestically now," Straszheim said. "So moving the currency for its short-term effect on economic activity within China is not the immediate motivation." Analysts said the possibility remains for the U.S. Congress to take punitive action against China on its currency policy in coming weeks. A series of high-level international meetings later this year could still put the spotlight on the yuan valuation issue, among them the UN General Assembly in New York next week--when China Premier Wen Jiabao plans to meet U.S. President Barack Obama, and the Group of 20 leading world economies summit meeting in November.
Wednesday, September 15, 2010
Inches away from an Asian trade war (update 2)
Japan rumored to have $588billion intervention 'ammo' and they have only spent (only) $23billion.
Let's see if China can match this with YEN buying, or selling and (if Timothy US Treasury officially begins the trade war) buys USD and drops the CNY.
Watch all commodity crosses and commodity futures for major price drops. Commodity markets may already be pricing a trade war.
Hedge fund paradise on short positions.
Let's see if China can match this with YEN buying, or selling and (if Timothy US Treasury officially begins the trade war) buys USD and drops the CNY.
Watch all commodity crosses and commodity futures for major price drops. Commodity markets may already be pricing a trade war.
Hedge fund paradise on short positions.
Tuesday, September 14, 2010
Inches away from an Asian trade war (update 1)
Japan intervenes in FX market first time in 6yrs buying 2 to 6 billion + of USD (buying 10million USD per lot). Don't worry China will be hot on the heels buying USD too and if needed buying YEN.
It's getting hot. Asia will start devaluing it's currencies...the war has begun.
Anyone shorting the USD whilst Asia buys (why? Asia FX reserves are a lot of ammo) is gonna get destroyed.
USD is bid
*personally with market intervention (gov/central bank) critique aside. Japan's tactic was a smart one, made the market sweat on possible intervention (for weeks); with the USD weakened in the last 5days. What better way to 'freak' the market. Shorts will cover, USD will be bid and the BoJ may rack up a profit...but then there is China with huge YEN reserves.
Shit is getting interesting.
Monday, September 13, 2010
Inches away from an Asian trade war
If Japan intervenes in YEN devaluation (under Ichiro Ozawa if able to win support to become PM, replacing current PM Naoto Kan). Asia will enter a trade war with it's self and also the US (re:China)
Of course central bank intervention in the market usually incurs losses (re: Swiss National Bank propping the EUR in May/June 2010)
Still Asian FX reserves took a beating in May/June 2010 when risk aversion caused the Korean WON and YEN to surge. If Japan goes mad and starts buying USD, China will also buy YEN and USD. South Korea, which is nursing losses from their last intervention, may just sit tight, or cut rates. That happens (rate cuts), Asia will go into a devaluation trade war, which the US will be drawn into.
"By David Roman
A Dow Jones Newswires Column
SINGAPORE (Dow Jones)--A Japanese intervention in forex currency markets might well fail to weaken the yen, but should have a near-term impact on other Asian currencies.
Japanese authorities have ratcheted up their rhetoric against a strong yen as the currency rises steadily, hitting a 15-year high against the dollar Tuesday.
Some analysts say Japanese intervention would embolden other Asian central banks, many of which have intervened heavily so far this year, to increase their own dollar purchases to protect their exporters. Likely candidates for a quick correction under that scenario would be the Taiwan dollar, Korean won and Singapore dollar, all currencies closely watched by their central banks.
Asian central banks "would be more likely to intervene" after a potential Japanese move, as it "would make them more comfortable with intervention," said Sean Callow, a forex strategist with Westpac. "All Asian central banks keep an eye on what the others are doing; they haven't been shy about intervening."
Japanese intervention might become likelier if Ichiro Ozawa, a kingmaker in the ruling Democratic Party of Japan, wins an internal party election Tuesday to replace Naoto Kan as party leader and prime minister. Ozawa has espoused a more activist line to curb the yen and protect Japanese exporters.
That could become a matter of concern for Japan's competitors, including South Korea and Taiwan, which have taken market share from Japanese exporters in fields such as automobiles and electronics.
Over the past two years, as the yen rose 19% against the U.S. dollar, the Korean won has lost 5% against the greenback and the Taiwan dollar has been flat. That has helped those economies -- which grew more than 7% on-year in the second quarter, compared with 1.5% growth in Japan -- to recover faster from the global slowdown.
Westpac's Callow said China's response to any Japanese intervention also would be key, as the Chinese yuan has become an increasingly relevant benchmark for Asian currencies. With Japan hectoring China to intervene less to weaken the yuan, China could react to Japanese intervention by slowing or even reversing the pace of yuan appreciation.
Singapore, where the local dollar rose to an all-time high against the greenback earlier this week, is another candidate to mirror any Japanese intervention. A person familiar with the Monetary Authority of Singapore's thinking said the central bank would be more likely to step in if Tokyo does.
On the other hand, Indonesia could find it hard to increase its intervention. As of last month Bank Indonesia's forex reserves stood at $81.3 billion, up 36% on the year -- among the world's largest gains -- as a result of sustained dollar purchasing in forex markets.
Bank Indonesia has expressed reservations about the quick buildup and announced several measures to increase monitoring of investment inflows in recent months, looking to find other ways to lessen pressure on the rupiah.
That's because Indonesia's high policy rates, now at 6.5%, make it more expensive to keep dollar reserves there than in other countries, as commercial banks must be paid interest in local currency in exchange for keeping dollars with the central bank."
Of course central bank intervention in the market usually incurs losses (re: Swiss National Bank propping the EUR in May/June 2010)
Still Asian FX reserves took a beating in May/June 2010 when risk aversion caused the Korean WON and YEN to surge. If Japan goes mad and starts buying USD, China will also buy YEN and USD. South Korea, which is nursing losses from their last intervention, may just sit tight, or cut rates. That happens (rate cuts), Asia will go into a devaluation trade war, which the US will be drawn into.
"By David Roman
A Dow Jones Newswires Column
SINGAPORE (Dow Jones)--A Japanese intervention in forex currency markets might well fail to weaken the yen, but should have a near-term impact on other Asian currencies.
Japanese authorities have ratcheted up their rhetoric against a strong yen as the currency rises steadily, hitting a 15-year high against the dollar Tuesday.
Some analysts say Japanese intervention would embolden other Asian central banks, many of which have intervened heavily so far this year, to increase their own dollar purchases to protect their exporters. Likely candidates for a quick correction under that scenario would be the Taiwan dollar, Korean won and Singapore dollar, all currencies closely watched by their central banks.
Asian central banks "would be more likely to intervene" after a potential Japanese move, as it "would make them more comfortable with intervention," said Sean Callow, a forex strategist with Westpac. "All Asian central banks keep an eye on what the others are doing; they haven't been shy about intervening."
Japanese intervention might become likelier if Ichiro Ozawa, a kingmaker in the ruling Democratic Party of Japan, wins an internal party election Tuesday to replace Naoto Kan as party leader and prime minister. Ozawa has espoused a more activist line to curb the yen and protect Japanese exporters.
That could become a matter of concern for Japan's competitors, including South Korea and Taiwan, which have taken market share from Japanese exporters in fields such as automobiles and electronics.
Over the past two years, as the yen rose 19% against the U.S. dollar, the Korean won has lost 5% against the greenback and the Taiwan dollar has been flat. That has helped those economies -- which grew more than 7% on-year in the second quarter, compared with 1.5% growth in Japan -- to recover faster from the global slowdown.
Westpac's Callow said China's response to any Japanese intervention also would be key, as the Chinese yuan has become an increasingly relevant benchmark for Asian currencies. With Japan hectoring China to intervene less to weaken the yuan, China could react to Japanese intervention by slowing or even reversing the pace of yuan appreciation.
Singapore, where the local dollar rose to an all-time high against the greenback earlier this week, is another candidate to mirror any Japanese intervention. A person familiar with the Monetary Authority of Singapore's thinking said the central bank would be more likely to step in if Tokyo does.
On the other hand, Indonesia could find it hard to increase its intervention. As of last month Bank Indonesia's forex reserves stood at $81.3 billion, up 36% on the year -- among the world's largest gains -- as a result of sustained dollar purchasing in forex markets.
Bank Indonesia has expressed reservations about the quick buildup and announced several measures to increase monitoring of investment inflows in recent months, looking to find other ways to lessen pressure on the rupiah.
That's because Indonesia's high policy rates, now at 6.5%, make it more expensive to keep dollar reserves there than in other countries, as commercial banks must be paid interest in local currency in exchange for keeping dollars with the central bank."
Sunday, September 12, 2010
The PBoC are....(update 2)
The Peoples Bank of China are still fucking with the market with a super low FX fix @ 6.75 against the USD.
Nice. By allowing the Yuan to strengthen (on again/off again), this causes Japan to hold off on devaluing their YEN (no support for intervention from US/China). Good tactic in someways, but it raises the ante of a protectionism/trade war/geopolitical tensions re: China bidding the YEN up to kill Japan's export edge.
Nice. By allowing the Yuan to strengthen (on again/off again), this causes Japan to hold off on devaluing their YEN (no support for intervention from US/China). Good tactic in someways, but it raises the ante of a protectionism/trade war/geopolitical tensions re: China bidding the YEN up to kill Japan's export edge.
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