Iron, imports and irony

There once was a time when China was feared likely to consume every iota of iron ore on the face of the earth. But with titans like Shougang Steel and Baosteel now agreeing to cut production to prop up falling prices, times have changed. The country’s import growth fell for the second straight month in September, largely caused by a decline in global commodity prices like iron ore. Just yesterday, two of China’s biggest ore suppliers, BHP Billiton and Rio Tinto, had to deny that they had disrupted shipments of the commodity to China after rumors that demand was slowing. Another rumor rolling around the rumor mill today related to China Investment Corp (CIC), one of the country’s sovereign wealth funds. Stable Investment Corp (here comes the irony), an affiliate of CIC, may have up to US$5.4 billion locked-up in a US money-market account. The money is in US-based Reserve Primary Fund, which suspended withdrawals last month after becoming the first US money-market fund to hand investors losses in 14 years. Stable, indeed. Meanwhile, back in China, beverage maker Wahaha has expressed interest in acquiring Sanlu, the dairy company at the center of the tainted-milk scandals and in dire need of some stability – even from companies with names that sound like maniacal laughs. Wahaha chairman Zong Qinghou told state media that buying Sanlu would save his firm from having to import 150,000 tons of milk powder a year. That’s not going to help those import figures.