China slowdown could affect resource profits

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Sep 2008

Resources analysts expect China to use the global credit crisis as an excuse to pay less for Australia's iron ore and coal. Australia's most lucrative export market, China, is facing slackening demand from US and European customers as well as a slowdown in the domestic construction and stock market. Research analyst Peter Arden from Ord Minnett says that will affect China's demand for our resources. "We would not expect it to be terribly dramatic on the physical volumes of commodities" he says.
"But what is important often with the commodity prices is the sentiment, and it could well be that commodity prices for the big commodities like iron ore and coal, instead of rising like we were expecting next year, maybe they're going to stay flat for a year or two."

Source: ABC