It won’t be long before the 2010 round of contract talks begin between the major iron ore producers and major European and Asian steel producers. Early estimates from pundits who cover the sector were for an increase of approximately 10% but recently the punditry has been a bit more bullish. But what is the contract price? Whereas base metals are produced by a large number of companies and traded on exchanges such as the London Metals Exchange, the iron ore market is dominated by three players, Vale, BHP Billiton, and Rio Tinto, who annually engage in direct negations with steel mills to supply mills for the following year. Negotiations tend to be drawn out and often don’t conclude until June. Miners took a cut in the price in 2009 due to the global financial crisis which saw steel production plummet during the period of the negotiations.

Prior to 2009, 2005 through 2008 had been boom years for iron ore producers.

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Ansteel · Aurox Resources · Baltic Dry index · BHP · China · Cleveland-Cliffs · Cliffs Natural Resources · Fortescue Metals · Gindalbie Metals · hematite · iron · Magnetite · Portman · Rio Tinto · steel · Sundance Resources · Vale

Just as Moses led his people out of Egypt, many see China leading the world out of an economic slump — although the numbers of those skeptical about China’s continued advance at its current pace seem to be growing.

One of the things I wanted to do was to have China economic data readily available.

I’m long overdue for a follow up to the previous article on Mathematica workflows so I thought I’d discuss the most difficult case I’ve encountered for both retrieval and processing: the National Bureau of Statistics of China.

After some trial and error you can eventually find your way to a page that lists all (?) the data available:.

Enthusiastic users would therefore click on a link and then seek to use Import to get the data directly into Mathematica. Unfortunately when you try and import this data you get $Failed. Save the page and then import it locally and of course you get the same (non)result. After inspecting the HTML code for these pages, which is quite a mess, I can only assume that they are doing something non-standard with their page coding that is causing Import to fail. Since I don’t know the inner workings of Import, and since I don’t know how to recognize, i.e. guess, lines of code that could be causing Import to break this presented a problem.

Eventually after some trail and error this is what I found worked best: (more…)

China

Chicago Fed National Activity Index (CFNAI) was released Thursday morning:

The picture remains grim for consumption and housing.

“Most of the weakness in the index continued to stem from the consumption and housing category. This category’s contribution to the index was –0.50 in December, down slightly from –0.46 in November. Housing starts declined to 557,000 annualized units in December from 580,000 in November. Partially offsetting this was an increase in building permits to 653,000 annualized units in December from 589,000 in the previous month.“

Having said that they stated that:

“… the level of activity remained in a range historically consistent with the early stages of a recovery following a recession.“

… notwithstanding the fact that, by their own measure, the recession has not ended:

“A CFNAI-MA3 value above +0.20 following a period of economic contraction indicates a significant likelihood that a recession has ended.“

Here is a chart of a 3-month moving average of the consumption and housing component of the broader index.

It does not appear possible for the CFNAI index to reach +0.2 until a significant recovery in housing and consumption occurs. In other words, it does not appear possible for the recession to be over, using the CFNAI index as a measure, until consumption and housing show significant improvement.

CFNAI · Chicago Fed · Consumption · Housing

The 3rd quarter states tax data was released while I was on vacation http://www.census.gov/govs/index.html. Because of the lag in the reporting of this data the retail sales survey is a more timely indicator of where State’s sales taxes are going to be, as I discussed previously. This first chart I have shows the current state of sales taxes relative to the trajectory sales tax revenues were on before the crisis. This provides an indication of the current shortfall relative to what the states may have expected, assuming they project one or two years ahead.

The next chart shows the growing cumulative debt of the states.

However when we chart the revenues and expenditures of the states we can see that revenues have exceeded expenditures for 9 of the 13 years shown in the chart. Note also the almost linear increase in expenditures over the charted period.

Here is a chart showing how the revenues are broken down:
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mathematica · state debt

The U.S. Census Bureau announced today advance estimates of U.S. retail and food services sales for December. The headline numbers quoted in the media are seasonally adjusted numbers.

It seems to me that if you compare numbers year-on-year you don’t need to use adjusted data; you can use raw data.

As far as the raw data goes, some good news for a change – or perhaps less bad, would be a better description. Year-on-year retail sales were up over 5%; however, it must be remembered that December 2008 was a disaster. When compared to December 2007, retail sales were down almost 4%.

The reason I consider this good, or less bad, is that as I showed in a previous article, sales were down 8.5% from November 2007 to 2009. So consumers rallied over Christmas more than they have in earlier months.

The question is whether this is a sign of a recovery in spending or simply that consumers are less willing to go without their Christmas retail splurge. January and February 2010 numbers will answer that question.

For the quarter, retail sales were up approximately 2% year-on-year. The inflation rate in 2009 was 2.7% according to data released today. Therefore in real terms retail sales for the quarter were down on 2008 data. If that is reflective of overall personal expenditures then a boost in GDP is not going to come from that segment.

retail sales