BHP Billiton (BHP -0.2%), a natural resources bellwether as the world's largest miner, cuts its...

BHP Billiton (BHP -0.2%), a natural resources bellwether as the world's largest miner, cuts its outlook for commodities prices over the next 3-5 years, FT reports, a move likely to cement the view that the decade-long commodities supercycle on the back of Chinese growth has peaked. BHP has already signaled greater discipline in its plans to invest ~$80B in new projects.

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Comments (4)
  • untrusting investor
    , contributor
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    Interesting view by BHP. They likely have a lot better information than most, so could well be correct. However, it seems unlikely that most commodities prices will be lower over the next 3-5 years.
    13 Jun 2012, 04:36 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
    The link needs to be corrected. Obviously should be pointing to some other article. The current link doesn't claim any such peak.


    "In its latest review of internal forecasts, BHP reduced the medium-term outlook for commodities prices, according to people familiar with the matter, who added the cuts were small and did not affect the longer-term view of the market."
    13 Jun 2012, 05:29 PM Reply Like
  • Ohrama
    , contributor
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    I think it goes well with my take on India and China (stated number of times) that their exponential growth in the last 5 or so years is due to one time purchase of cars and appliances by a small % of the population {who will go on to minimally use (in other words they are more prestige symbols, like I got a washing machines; in many places there is shortage of water or electricity or both!), repair and reuse for the next 20 years (I suppose not unlike the 1950's here)} and bound to fall from those high levels soon. The real push will come when they learn to move the economy from serving their colonial masters (by paying their workers peanuts) to proper training and efficient use of their work force in technology (right now most in India are treated like dirt and trained in nothing and those who can learn something think that computer is everything) that brings more money into the hands of higher % of the population that unleashes the local consumption leading to a positive feedback loop. And when that happens (perhaps in 20 years), all the materials will become scarce.
    13 Jun 2012, 07:39 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
    If this is anything other than a multi-decade event then it will be unprecedented in history. The rise of the US, the rise of Japan, etc. were all multi-decade events. There's no sign that China or India are going to hit a brick wall. China only just recently passed Japan. They still have a long way to go to catch up to the Western standards, and to expect these populations to just give up (when in fact they're a lot more motivated and driven than most of the West now) is an extreme stretch. I was just reading a book the other day that cited the number of vehicles per capita in the US and China, and that even with the growth that has occurred China is still only approx 50 vehicles per 1000 persons versus about 750-800 in the US.


    There's way too much being made of a slow-down in growth as if SE Asian growth is a binary function - either it's on an exponential upward curve, or it's falling off a cliff. There is precedent for a pause and slower growth. Neither the US nor Japan went straight up over three to four decade periods.


    Here's one bit of evidence that the imminent peak and crash of China (which I think I've been hearing now for at least the last five years) is still a ways off.

    13 Jun 2012, 09:48 PM Reply Like
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