Higher prices? Thank China, page 1
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Topic started on 9-4-2004 @ 05:59 PM by DontTreadOnMe
We've all seen the price of oil steadily increasing, above the normal summer formula increases.
The rest of the world is catching up with us. Esp. China.
It seems to me that our country is changing, and doing it faster than any of us may realize. It is not a change for the good, either.
And it's not just oil. It's other raw materials and manufactured goods.
Is this another step closer to a world economy??

"Higher Prices? Thank China
China's insatiable hunger for raw goods is starting to sting U.S. consumers
By Marianne Lavelle

The same global economic forces that have consumers paying higher prices at the gasoline pump may soon have them shelling out more money for their beds, their appliances, and even their food.

In a trend apparent at the start of the year that has accelerated in recent weeks, prices have been soaring for nearly every one of the world's major commodities--the raw materials like metals, grains, and fuels that are essential to making the familiar products of modern life. Until now, consumers remained blissfully unaware of the chaos in the commodities markets, because manufacturers have absorbed the increased cost of doing business rather than raise price tags in auto showrooms and department stores. But the strain is beginning to show, and a few companies have indicated they will ask customers to help share the burden.

Most economists doubt that the run-up in raw materials will lead to widespread inflation. The Federal Reserve clearly has debated the issue but concluded that other factors in the economy--such as relatively high unemployment--will keep the risk of spiraling prices low. Nevertheless, a few analysts see the current rumblings as the beginning of a major shift in the global economy, in which new wealth and continued population growth in Asian countries force U.S. consumers to pay more for limited world resources.

Bill O'Neill, a principal with commodities research firm LOGIC Advisors in New Jersey, can sum up the reason for the commodities upsurge in a single word: China. "The warning signs were out there that Chinese demand for industrial commodities would be strong, but I think it happened quicker than some people thought," he says. With its economy growing at an annual rate of nearly 10 percent, even while adding 11 million per year to its 1.3 billion population, China has been gobbling up raw materials. Markets are merely reflecting the fact that for the first time, the world's most populous country now has a significant number of citizens who can afford cars, meat, and better housing."

www.usnews.com...

[edit on 13-10-2004 by DontTreadOnMe]


reply posted on 9-4-2004 @ 09:08 PM by Ambient Sound
Yeah, this is certainly the a growing problem. Do you think these will be called the "Oil Wars"? I would like to point out that gas in the US is still very cheap compared to many other places.
Gas Prices

I lived off the grid for several years and it requires some life-style changes that most Americans would have a hard time accepting, unless they have to. When I did it, it would cost roughly $20,000 in equipment to make an average dwelling energy sufficent off the grid and that is if you have the proper type of location for it (sun path, wind, stream).

I don't understand why more people aren't pumping money into wind and solar research. Well, I do understand. The power companies wouldn't be able to sell as much power. As far as I'm concerned the roof of every building in the country should be covered with some type of Photovoltaic energy collection shingle and at least one small windmill. Like anything else, if we would buy sh**loads of em, then they would get really cheap. Wouldn't you know it? BP, the oil company purchased one of the biggest solar panel manufacturers several years ago and you can find the solar panel section on their website.

Oil prices are going to keep going up but not just because of China. Oil production in the Middle East might be an iffy thing for the next several years as the war over there gets worse.

So much for the big SUVs shortly. My motorcycle gets about 40 - 45 mpg if I don't get too crazy with the throttle.


reply posted on 9-4-2004 @ 09:53 PM by Seekerof
AceofBase, those are some great numbers, but do not indicate nor show what the topic of this thread is indicating: that being that China's consumtion of oil and demand for it is growing at phenomenal levels. Industrialization is increasing in throughout China.
Example:
China to consume 270 million tons of crude oil in 2004

In constrast, the US uses roughly 890+ million tons of crude oil. Thats roughly 19 and a half million barrels a day.
Consumption records

Though this may seem insignificant, China's increasing demand for oil is having an effect on oil prices, though unmentioned somewhat by the media...focus is mainly on OPEC and their reasons.
The below article will indicate how dramatic the Chinese demand for oil is:
The Sino-Saudi Connection

Such a gigantic fleet requires fuel. But China’s domestic oil production is declining. Already by 1993, after decades of self-reliance, domestic crude output was failing to meet the growing demand, and the country became a net importer; since then, dependence on foreign oil has increased steadily. According to a conservative estimate by the U.S. Department of Energy, China’s oil imports over the next two decades will grow by 960 percent. The International Energy Agency predicts that, by 2030, those imports, now at 1.9 million barrels a day, will rise to at least 10 million barrels a day, the current import level of the United States.

Some Chinese oil imports come from Kazakhstan, Venezuela, the Sudan, Russia, and Indonesia. These will no doubt continue, and increase. Nevertheless, a decade hence, the lion’s share of China’s energy imports will almost certainly come from one source: the major oil exporters of the Middle East.


And last month, China just signed another contract for another 6.4 -- 8.5 million tons:
Contract ensures more oil delivery to China

The two Russian companies agreed to raise oil exports by rail to 6.4 million tons this year from 3 million tons last year, according to Xinhua News Agency.

The delivery is expected to increase to 8.5 million tons in 2005, and to 15 million tons by 2006. It will further increase from 2007.

Earlier in last month, China National Petroleum Corp (CNPC), the nation's largest oil producer, agreed to buy 10 million tons of oil annually from Yukos starting from 2006 for seven years.




seekerof

[Edited on 9-4-2004 by Seekerof]


reply posted on 10-4-2004 @ 10:31 AM by DontTreadOnMe
Originally posted by worldwatcher
are you really suggesting we thank China, or are you putting the blame on China...because right now it's the problem may be partly to blame on China's increasing need, but China will not be the only one with higher demands...as we continue to globalize, more countries will also develop their needs.

btw there are alternatives already, but for some unknown reason, our govt (not just this administration) doesn't want to give up on the black stuff. They probably feel it would be too expensive to refit everything to use the alternatives.


If you were asking me, no, I am not thanking China for this. I am quie concerned. And not just about oil prices. It's just that they are the first to show themselves as spiralling upward due to increased world demand.
Other raw materials and manufactured producats are sure to join the list of things becoming more expensive.

In response to your alternataive fuels paragraph, I have often wondered at the fear we have of nuclear power plants when other parts of the world have them, no problem. Is this becasue the govt has instilled this fear? To keep up dependent on oil? Why?

_____
Another product that had higher prices due to China and other countries was BEEF. Last summer, after the beef scares in Canada and the US, the price of beef soard.
One of the reasons was the supply was limited. What most of us didn't know was the supply was even less than it should be: The beef industry had contracts with mainly Japan, China and other parts of Asia. Those contracts were fulfilled first. We had a much smaller supply becasue of these contracts; hence the higher prices than expected. BTW, those prices were supposed to come down after the first of the year. Ha-ha!
I have no link to this. My butcher showed me a letter last year from the beef assoc. or whatever, spelling this all out.

[Edited on 10-4-2004 by DontTreadOnMe]


reply posted on 10-4-2004 @ 11:11 AM by Ambient Sound
In response to your alternataive fuels paragraph, I have often wondered at the fear we have of nuclear power plants when other parts of the world have them, no problem. Is this becasue the govt has instilled this fear? To keep up dependent on oil? Why?


Here is an interesting take on Nuclear Power from a person who goes and rides her motorcycle through the area around Chernobyl. I thought it was interesting.

Radioactive Ride

I don't trust the machanical systems that humans build enough to think that we can use nuclear energy safely on a large scale at this point.

I have to worry about what China might be doing on the nuclear front as well.

China's Non-Military Nuclear Status - www.eia.doe.gov

Hmmmm. Not as much as you would think. Only four reactors but more planned. They are all on the coast too. This source pretty much concluded that their Nuclear power industry won't make much of a dent in their increasing demand for oil.
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