Forecasting China Prices — and Taking Action

Over on Metal Miner, my colleague Stuart Burns does about as good a job as any at forecasting China prices for a range of metals products for 2008, as well as offering strategies for those sourcing from the region. On a high level, the three areas driving changes in the China price are, "import duties, changes in export duties and changes in the RMB/USD exchange rate." Even for those sourcing finished components and other categories from the region, the information Stuart presents should prove quite useful indeed. His last recommendation is something we should all take under advisement: "As a buyer of Chinese produced products, if you can cover your RMB exposure for 2008, then do it now. It's likely to have a bigger impact on your costs than any tax changes and is the one variable that can be hedged."

- Jason Busch

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