According to China Economic Net the number of large scale mines in China has climbed to 4,684, while overall the number of mines has decreased from 127,000 (in 2005) to 113,000 in 2010. The number of coal mines has decreased from 18,000 to 13,000while coal production has risen from 2.2 billion tons to 3.2 billion tons. We have no idea how many mines operate here in the United States but somehow doubt we have anywhere near One Hundred Thirteen Thousand. That also applies for coal mines numbering far less than Thirteen Thousand coal mines reported in China…and the Chinese are net importers!
The business of tariffs and how they affect shipping are our primary focus as we examine an article from Reuters wherein the readers are told about the Moroccan Government slapping a 135% tariff on soft wheat coupled with 80% applied to durum. The local wheat produced is of such poor quality that it must be mixed with an increasing amount of imported grain just to yield a product that will bake. Who would like to guess if the tariff helps the poor local farmer, or the wealthy and privileged leaders? Anyhow it caught my eye as being expensive and probably does the people a disservice.
China has received the first of Vale's giant iron ore vessels: The last Dry Bit today also comes from our Buds at Reuters and the story is about China, the Chinese Shipowners Association (CSA), and Vale’s super sized (VLCC) vessel the Berge Everest. It has been confirmed that the vessel’s cargo of iron ore is being unloaded at Dalian China. This is a monumental event that underscores a few ideas. First the idea that an organization that represents over 80% of all Chinese Shipowners would be trumped by the steel industry should give us an idea of how that food chain plays out. The political power clearly goes to the Mills when it comes to Beijing and for good reason. When we look at the many jobs created and sustained through the steel industry and the quality of life for those numerous employees, it is a no brainer that a handful of private shipowners (even though wealthy) would be so easily ignored. The TonMileTrader resident dry bulk analyst Boomer James has a different take on these events. "China has allowed Vale (at least temporarily) access to its ports in part because of the discord with MERCOSUR. China believes this will gain them leverage as they try to overcome some protectionist sentiments harbored by some of the member countries. The folks from the trade group tell us that South Americans do not want cheap Chinese goods to flood their markets. Boomer says if the Chinese feel offended after discussing this with MERCOSUR they will certainly pull the VLCC welcome back off the table."
Good Fortunes
Ski@TonMileTrader
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