@Фискалист + GS Lv-Max (the Australia friend)
With commodity prices slumping, the local currency slipping and manufacturing jobs disappearing, Australians are starting to question whether they've backed the wrong economic horse. The country's wealth and unbroken 24 years of economic growth have largely been built on exploiting natural resources and the happy coincidence of being close to China just as its demand for iron ore, coal and other minerals exploded.But with China's growth slowing and many commodities in structural oversupply after resource companies over-estimated future demand, Australia finds itself facing some uncomfortable issues.Liquefied natural gas (LNG) neatly encapsulates the problems facing Australia. A combination of international and local companies have invested about $200 billion in the past few years to massively expand Australia's LNG capacity, building eight new projects.This will more than quadruple Australia's output of the super-chilled fuel to over 80 million tonnes per annum, in the process overtaking Qatar as the world's largest producer and leaving regional rivals Malaysia and Indonesia far behind.But much like iron ore and coal, it now appears that the demand forecasts for LNG that underpinned the projects were optimistic, and producers are likely to find it increasingly difficult to source buyers, especially for the part of output that isn't tied to long-term contracts.
With commodity prices slumping, the local currency slipping and manufacturing jobs disappearing, Australians are starting to question whether they've backed the wrong economic horse. The country's wealth and unbroken 24 years of economic growth have largely been built on exploiting natural resources and the happy coincidence of being close to China just as its demand for iron ore, coal and other minerals exploded.But with China's growth slowing and many commodities in structural oversupply after resource companies over-estimated future demand, Australia finds itself facing some uncomfortable issues.Liquefied natural gas (LNG) neatly encapsulates the problems facing Australia. A combination of international and local companies have invested about $200 billion in the past few years to massively expand Australia's LNG capacity, building eight new projects.This will more than quadruple Australia's output of the super-chilled fuel to over 80 million tonnes per annum, in the process overtaking Qatar as the world's largest producer and leaving regional rivals Malaysia and Indonesia far behind.But much like iron ore and coal, it now appears that the demand forecasts for LNG that underpinned the projects were optimistic, and producers are likely to find it increasingly difficult to source buyers, especially for the part of output that isn't tied to long-term contracts.
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