Here It Comes – -China’s Monumental Dump Of Surplus Steel, Aluminum And Other Industrial Commodities

The world is about to have a good old-fashioned glut on its hands, courtesy of China’s problematic economy.
And the world is already starting to feel the pain.
The problem is that China’s got too many companies producing things like coal and steel, and the state-owned enterprises (SOEs) doing this have racked up debt that’s now eating up their profits.
The government is trying to shift the whole economy from its dependence on manufacturing, and it has already said that millions of people in some of these industries are going to be laid off in the next few years.
But China can’t just shutter these companies overnight, because they still need to pay back the banks holding their debt and it would be an unmitigated disaster for employment.
So these products have to go somewhere, and that means they’re going to be exported to the world. There are a bunch of industries that need this treatment too.
China’s crude steel, aluminum, shipbuilding, chemicals, cement, refinery products, flat glass, and paper will all have to be unloaded on the world, whether the world needs them or not. (Mostly not.)

This post was published at David Stockmans Contra Corner on April 8, 2016.