U-T SPECIAL REPORT
Boom felt across globe
China's voracious appetite for materials drives up costs in West U-T special report The dragon awakes
By Dean Calbreath
STAFF WRITER
March 21, 2005
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Each month, China needs to build the equivalent of a Houston or a Philadelphia just to keep up with population growth. Each year, Shanghai – about the geographic size of the city of San Diego but with 10 times the population – constructs or renovates 200 million square feet of building space, about the same amount as all the office space in New Jersey.
To fuel that boom, and to feed its hungry factories, China uses more than two-fifths of the world's annual output of cement, one-third of its iron ore, one-quarter of its lead and steel, and more than one-fifth of its copper, aluminum and zinc. The country's unprecedented demand for raw materials has had far-reaching effects, helping drive up the price of raw materials last year and creating short-term shortages throughout the world.
When victims of the 2003 San Diego County wildfires tried to rebuild their homes, some were told the price of wood had risen because of demand from China. And when the Sweetwater School District in Chula Vista wanted to repair some of its facilities last year, it had a hard time finding cheap concrete because so much was being used by China.
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To most consumers, perhaps the most visible effect of China's growing demand is the recent rise in worldwide oil prices, as an ever-increasing number of Chinese switch from bicycles to automobiles. More than 2 million new drivers hit the roads in China last year – helping make China the world's No. 2 consumer of oil, after the United States – and the number of new drivers is increasing at double-digit rates each year.
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China is not the only reason for last year's shortages and price increases. War, terrorism and political disruptions helped push up the price of oil. Hurricanes and plant consolidations also put a crimp on building materials. Renewed production by North American factories chewed into metal supplies. In California, the demand for construction materials was also driven by a spate of public works projects. Unlike one-time events that roil the marketplace, China's demand for raw materials represents a growing source of pressure that could affect commodities for decades to come.
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Find this article at:
http://www.signonsandiego.com/uniontrib/20050321/news_lz1n21china.html Dean Calbreath: (619) 293-1891;
[email protected]