FTSE100 now officially in bear teritory

Graham_Devon

It's fallen 20% since it's high in April 2014.

Just sayin.....

Oil and commodities seem to be weighing heavy on the stockmarkets, alongside worries over China- meanwhile people seem to be worried that we are heading for 2008 all over again.

http://www.theguardian.com/business/2016/jan/20/investors-run-cover-repeat-of-2008-financial-crash-davos-bear-markets

Fears that the global economy could be heading for a repeat of the 2008 financial crash have sent shockwaves through financial markets – prompting a rush to safe havens by investors.


Oil prices fell to a fresh 12-year low on Wednesday and metal prices tumbled in response to warnings that China’s slowdown could derail the global recovery at a time when central banks, which came to the rescue in the credit crunch, have only limited firepower.

Generali

http://www.bloomberg.com/news/articles/2016-01-20/the-most-interesting-things-said-at-davos-today

Meanwhile, with markets spiraling lower, there's plenty of interest in oil. In the five stages of oil market grief, CEOs are getting closer to the acceptance stage, as they acknowledge that there may not be a quick bounce-back on the horizon, but that prices could stay low for a long, long time.
The good news is that there's still a glass half-full attitude among attendees. Hope remains that the oil crash could spur pent-up demand (a notion that was popular a year ago but that feels increasingly quaint). In general, the mood is not as negative as markets may have you believe.

I thought this was interesting. It's the proportion of World GDP (actually GP because 'Domestic' doesn't apply when talking about the world) spent on oil.



For better or worse, oil is basically as cheap as it's ever been.

Thrugelmir

Estimated that the Chinese steel industry lost $5 billion in 2015 and is currently only operating at only 50% capacity. What hope for the remaining UK steel producers?

Crashy_Time

Thrugelmir wrote: »

Estimated that the Chinese steel industry lost $5 billion in 2015 and is currently only operating at only 50% capacity. What hope for the remaining UK steel producers?

Zero. What hope some unremarkable house in some little unremarkable London suburb can hold it`s bubble value?

Mistermeaner

How can it be repeat of 2008? I thought that was all them bankers what did it

Generali

Thrugelmir wrote: »

Estimated that the Chinese steel industry lost $5 billion in 2015 and is currently only operating at only 50% capacity. What hope for the remaining UK steel producers?

Our commodities bloke reckons that Chinese steel is operating at 75% capacity and needs to be running at 85% to break even. The gap is basically equivalent to the entire steel output of Western Europe.

cells

Thrugelmir wrote: »

Estimated that the Chinese steel industry lost $5 billion in 2015 and is currently only operating at only 50% capacity. What hope for the remaining UK steel producers?

that does not sound that big a loss. China has about 300 big steel plants (or the equivalent) so only about $15m lost per plant and only about $5 per ton of steel. I think your $5 billion figure is probably some pie in the sky in that its probably plucked out of think air neither too high or too low just a pure internet guess

cells

Generali wrote: »

Our commodities bloke reckons that Chinese steel is operating at 75% capacity and needs to be running at 85% to break even. The gap is basically equivalent to the entire steel output of Western Europe.

blast furances are only really designed to run at 100% or 0% and then its a hell of a job starting up again

they will close some steel plants and it wont be the end of the world. plenty of steel plants have closed in the west (well before china was even a thing)

cells

Generali wrote: »

Our commodities bloke reckons that Chinese steel is operating at 75% capacity and needs to be running at 85% to break even. The gap is basically equivalent to the entire steel output of Western Europe.

its just a case of shredding the excess. the steel industry will survive. just like the farming sector cant go bankrupt nor can commodities or steel just some players need to go to the wall for the rest to continue

however in the last steel downturn in 2008-2010 there was a reasonable recovery as the world didnt end and there probably will be again

Thrugelmir

cells wrote: »

that does not sound that big a loss. China has about 300 big steel plants (or the equivalent) so only about $15m lost per plant and only about $5 per ton of steel. I think your $5 billion figure is probably some pie in the sky in that its probably plucked out of think air neither too high or too low just a pure internet guess

Only is relative. What are the operating costs in China compared to the UK - 10% ? Globalisation is levelling off the playing field.

Anything in China is a guess!

We should be more concerned with protecting UK jobs and industries. China can play hard ball. In the same way Saudi is with oil. Protectionism isn't healthy.

cells

Thrugelmir wrote: »

Only is relative. What are the operating costs in China compared to the UK - 10% ? Globalisation is levelling off the playing field.

Anything in China is a guess!

We should be more concerned with protecting UK jobs and industries. China can play hard ball. In the same way Saudi is with oil. Protectionism isn't healthy.

I dont know what the operating costs are in china but I do know that most of their steel plants were built with labour much cheaper than today and wage inflation has paid off the assets

China or not the robots and productivity and better methods are destroying the number of jobs in the steel industry. I used to work at a steel plant that had 30,000 men and produced 1 million tons a year. by the time I left it was closer to 2,500 men and 3 million tons of steel. I can see it going to 1,000 men and 4 million tons of steel so there is a 70% jobs cull coming to the steel industry worldwide over the next couple of decades