China rise rewrites rule book

Australia: "BHP Billiton's stunning profit captured both the dramatic global impact of China and the particular benefits it bestows on Australia. BHPB's bonanza was very much Australia's bonanza.

"Striking was not just the sheer size of China's economic boom, and so its voracious appetite for raw material, revealed in the BHPB numbers. But also the speed with which it has erupted.

"Even just three years ago when BHPB was bedding down the first results from its merger, no one could have and no one indeed did anticipate the coming size and speed of the China impact.

"In 2002 group revenue was 'just' $US15 billion.

"In three years it's more than doubled, to $US32 billion ($42.2 billion). Profit has grown even faster - at the EBITDA level, from $US4.7 billion to $US11.4 billion.

"With China leapfrogging Japan to become the company's single biggest geographic customer. Japan! The country on which BHP - and Australia - had built prosperity, running back over nearly 40 years, caught and supplanted in just a few years.

"China benefits BHPB - a pretty good proxy for Australia more broadly - in two direct ways. Obviously, what it actually buys and the price it pays.
The most striking example is iron ore to feed its exploding steel industry. The volumes it buys have been rising exponentially and, after the latest price negotiations, it is going to pay 70 per cent more on every tonne of those higher volumes.

"The second benefit is less obvious but just as direct. The way Chinese demand is pushing up the price of all commodities. So BHPB, and Australia, gets the benefit on stuff it/we sell to someone else.

"The most striking example is oil and gas. It is Chinese demand that is the new kid on the block - since the late-1990s rising Chinese consumption has been the crucial "swing factor" between global demand and supply of oil and gas, but especially oil.

"Depending on which measure you use, China is somewhere between 5 per cent and 10 per cent of the global economy; and even in population terms is only a little bit more than 20 per cent of the world. Yet, it has been driving one-third of the increased global demand for oil."
News.com.au

BHP profit 'may touch $11bn'
"Perth - With net profit shading US$10bn in the next year or so, BHP Billiton's (BHP) growth trajectory is leaving rivals in its wake.
Having struck a rich vein of iron ore, copper and oil prices, $11bn or more might be in reach for the global mining company if the China-driven commodities boom lingers for another 12 months, analysts believe."
Finance24.com

What's mined is yours
"COMPANY profit reports come and go but the $8.6 billion jackpot revealed by BHP Billiton on Wednesday was no run-of-the-mill result. Not only did it smash the Australian corporate profit record, it epitomised powerful forces at work in the economy, illustrating how the biggest commodity price boom in more than a century is boosting the economy.

"Access Economics estimates that a surge in prices for some of Australia's main mineral exports, fuelled by resource-hungry China, is pumping $40 billion a year extra into the economy, compared with 2003."
Sydney Morning Herald

Overall, it's boom time, China
Demand for Commodities Sends BHP Billiton Profits Soaring

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