Slowdown...

by afew Thu Aug 30th, 2012 at 06:28:08 AM EST

The OECD has a press release out showing the slowdown in merchandise trade in major economies.

Merchandise trade slowed in most major economies in the second quarter of 2012, with contractions in all major European economies, India, Russia and South Africa.
Imports and exports fell in France (by 4.7% and 2.5% respectively), Germany (by 3.5% and 2.5%), Italy (by 2.8% and 2.4%) and the United Kingdom (by 1.1% and 4.2%).
Imports and exports also fell in India (by 13.0% and 4.3%), Russia (by 4.6% and 8.3%) and South Africa (by 0.7% and 8.3%).

This is the G7 + BRICS:

Merchandise trade in US$ billion (Customs data)

Thoughts on that one?

More graphs below the fold.

Merchandise trade in US$ billion (Customs data)

France:

Germany:

UK:

Italy:

US:

Japan:

Canada:

China:

Russia:

Brazil:

India:

Slowdown... | 21 comments (21 topical, 0 editorial, 0 hidden)

Re: Slowdown... (4.00 / 3)

If the slowdown in merchandise trade were due to policies designed to rein in globalisation, that wouldn't bother me. But it's a consequence of the GFC (or GCF, read the acronym as you will). And the seven richest economies plus the up-and-coming new guys are net importers from the rest of world.

A breakdown of the imports would surely show energy as the prime suspect (cf Russia in these graphs)?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 06:39:01 AM EST

Re: Slowdown... (none / 1)

Raw materials imports to China could also be a factor.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Aug 30th, 2012 at 08:10:20 AM EST
[ Parent ]

Re: Slowdown... (none / 0)

There doesn't seem to be a clear view on that:

PREVIEW-China commodities imports seen weakening further in July - CNBC

SHANGHAI/HONG KONG, Aug 8 2012 (Reuters) - China's imports crude oil, copper, coal and iron ore are expected to drop for the second consecutive month in July as a stuttering economy and high stockpiles keep buyers at bay.
China is the world's biggest consumer of commodities, and last month saw global iron ore prices tumbling 13 percent and thermal coal prices hitting a 30-month low, declines that would normally have encouraged restocking.
But with industrial activity slowing as the euro zone financial crisis bites and the economy growing at its slowest pace in three years, Chinese traders have stayed on the sidelines as they doubt demand will recover soon.
China is the world's second-largest buyer of crude oil and the world's top consumer of coal and iron ore, copper and other industrial metals.
Trade data for July, expected on Friday, will be closely watched by investors hopeful that any positive news would boost the global economy, but the figures are expected to show the world's second largest economy is, at best, stabilising.

2012 remains strong year for Chinese commodity imports: Barclays | www.commodityonline.com | 3

LONDON (Commodity Online): Strong Chinese imports of commodities to continue this year, said Barclays Capital in a commodities research note.
According to the bank, year-on-year rises as "still robust" even though growth has slowed from the rapid rates early in the year.
The most recent data show copper net imports up 27% year-on-year with sharp gains for zinc and tin as well. Corn imports were up 318% year-on-year, wheat 133%, soybeans 10%, oil 12% and platinum 102%.
Some pundits suggest the strength in imports, despite China's slowing economy, is because commodities are being used to raise financing or to fill strategic stocks, rather than immediate consumption.
"While we agree these factors have been important in some markets, especially copper and, to some extent, crude oil and some agricultural commodities, we think it a mistake to attribute all of the recent strength to factors such as these," Barclays said.
The British bank continued that, "Indeed, indicators of local demand collected directly from source or calculated independently of trade flows suggest that consumption levels still look very healthy.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 08:45:52 AM EST
[ Parent ]

Re: Slowdown... (none / 0)

Import in tonnes can be up with imports in dollars down at the same time, in principle.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 30th, 2012 at 09:13:59 AM EST
[ Parent ]

Re: Slowdown... (none / 0)

True, but that would be with falling commodity prices.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 09:21:56 AM EST
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Re: Slowdown... (none / 0)

Apart from coal and iron ore...

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 09:24:11 AM EST
[ Parent ]

Ah, but... (none / 1)

Reuters corrected the Aug 8 wire:

CORRECTED-WRAPUP 1-China July commodities imports stay high; outlook weakens | Reuters

(Corrects and recasts first paragraph to say China's imports of key commodities, such as iron ore and copper, held up better than expected, rather than defied expectations for a fall)
* Imports hold up better than expected, but outlook poor
* Copper imports up 6 pct in July; iron ore off 0.8 pct
* Analysts expect bigger declines in August, Sept imports
* Timing of expected policy easing seen critical
By Fayen Wong
SHANGHAI, Aug 10 (Reuters) - China's imports of key commodities, such as iron ore and copper, held up better than expected in July, but weak trade figures and a nine-month low in crude oil imports painted a picture of a slowing economy.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 09:38:31 AM EST
[ Parent ]

Re: Slowdown... (none / 0)

Latest on China: Sober Look via Ed Harrison

2. Imported iron ore prices are collapsing, pointing to extreme weakness in industrial demand. Steel and coal prices remain weak as well. There have been speculations that this is a coordinated attempt by China to control commodity inflation and stick it to the Australians. It's not clear if there is merit to these rumors.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Aug 30th, 2012 at 10:05:49 AM EST
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Re: Slowdown... (none / 0)

The iron market is going to hell. Not good for me. I've heard rumours that at current prices half of all Chinese ore mines are operating at a loss.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Sep 5th, 2012 at 09:33:31 AM EST
[ Parent ]

"read the acronym as you will" (none / 1)

Greed Factor Counter?
Gruesome Fucking Centre?
Global Fatness Cluster?

I hate all acronyms. They cost me, as a non-English speaker, a lot of time. Just sayin'

by Katrin on Thu Aug 30th, 2012 at 10:21:27 AM EST
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Re: "read the acronym as you will" (none / 0)

GFC -> Global Financial Crisis

Ever since I learnt about confirmation bias I've started seeing it everywhere

by ATinNM on Thu Aug 30th, 2012 at 10:55:43 AM EST
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Re: "read the acronym as you will" (none / 0)

You're right, acronyms should be avoided (whatever the language).

It's just that that one (Global Financial Crisis) always morphs for me into GCF, Giant ClusterFuck.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 11:01:05 AM EST
[ Parent ]

Re: "read the acronym as you will" (none / 0)

Same here.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Aug 30th, 2012 at 11:20:20 AM EST
[ Parent ]

Re: "read the acronym as you will" (none / 0)

Well, you're somewhat responsible... :)

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 02:04:49 PM EST
[ Parent ]

Re: "read the acronym as you will" (none / 0)

Go ahead, blame the messenger.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Aug 30th, 2012 at 04:04:55 PM EST
[ Parent ]

Re: Slowdown... (none / 0)

This is from Deutsche Welle, caveat emptor:

BRIC states fade into MIST | Business | DW.DE | 30.08.2012

These four emerging markets are responsible for nearly half of the last 10 years' worth of global economic growth. But chinks are beginning to appear in the armor of these former economic warriors. Brazil is suffering from a strong currency, Russia is struggling to enact reforms, India is dragged down by corruption and China is no longer growing fast enough to create new jobs.
(...)
The magazine "The Economist" has invented the term CIVETS, standing for Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa. The mutual fund group Fidelity has minted MINT - Mexico, Indonesia, Nigeria and Turkey - while the Bloomberg news agency has told people to stare into the MIST to see where growth will come from. MIST would be Mexico, Indonesia, South Korea and Turkey.
"The so-called 'next 11' unites the countries that each produce 1.5 percent of the gross world product," Langhammer said.
(...)
The MIST countries are particularly heterogeneous. Mexico is growing faster than Brazil, but is largely dependent on trade with the United States. Indonesia has raw materials and a young population, but its political system has been labeled fragile. South Korea is not really an emerging country anymore, its population is graying and growth rates are falling. And in Turkey the economy is experiencing strong growth, but much of it relies on foreign investment that could disappear if the global economy is hit by another crisis...
"They are very closely tied to the BRIC countries. Indonesia, for example, is a key raw material exporter for China," Langhammer said. "If China's growth slows down, then the trees that make up Indonesia's raw materials won't continue to prop up the economy."
Several economies, especially in Asia, are tightly interwoven with each other in terms of trade and the movement of capital.

(h/t In Wales)

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 02:10:00 PM EST
[ Parent ]

Re: Slowdown... (none / 1)

Mist = manure in German.

Well done, Deutsche Welle!

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Aug 30th, 2012 at 04:03:24 PM EST
[ Parent ]

Re: Slowdown... (none / 0)

How come UK exports stayed flat while all EU ones dropped?

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Aug 30th, 2012 at 08:08:20 AM EST

Re: Slowdown... (none / 0)

They don't seem to have climbed out of the trough as strongly as, say, France and Germany.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 30th, 2012 at 08:34:12 AM EST
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