Origin of Headless Commodities Price

Blaming the Fundamental: Straightforward “Demand and Supply” nice Prof Krugman says,  don’t blaming innocent speculators, they are only  products of the fundamentals,  blaming the fundamental, the demon supply and demand as the below picture tells ten thousands stories or more:   

And he asks and answers

Up at the top are cotton and iron ore. What’s going on up there?

First and foremost, China: it’s clear from news coverage that Chinese demand is driving the markets. As I and others have been pointing out, we’ve got a bifurcated world right now, with advanced economies still depressed but emerging economies in an inflationary boom; commodity prices are reflecting the boom part of the picture.

And

The below from The Age, Alan is the kind pointer, also highlight the trend of the commodity demand.

This is the China that McKinsey & Co sees when it projects that the country could build a new Chicago every year for the next two decades, including more than 1500 new skyscrapers more than 30 storeys high. By 2025, it says in a report, China is on track to have 219 cities of more than 1 million people and 24 cities larger than Sydney. In places like Chongqing, the odyssey from peasant to city resident, which comes with entering the international marketplace, is only halfway complete.

Every apartment block above about five storeys needs to be reinforced by steel. So too every rail tunnel and road bridge and the rolling stock and vehicles that speed along them. Each tonne of steel requires about 1.6 tonnes of iron ore and another 850 kilograms of high-quality "coking" coal - commodities that Australia has in quantities that most of the world can only dream of.

This is the seemingly inexorable urbanisation that BHP Billiton's Marius Kloppers, Rio Tinto's Tom Albanese and Fortescue's Andrew Forrest have in mind when they push through with breathtaking new expansions of their Pilbara iron ore mines. Last month, China imported 62 million tonnes of iron ore, 24 million tonnes of which was shipped directly from Australia.

P.S Today  Prof Krugman's NYT  article  and also in his blog  relevance  the above.

I am the greedy reader and thankful poster YSK-W