The news from China continues being consistent with a substantial real estate slowdown which has prompted me to predict that the worldwide steel, copper and iron ore markets will be impacted.

I've written at length on the problem, a crude estimate of residential units under construction in China puts the number at around 48 million units. This is a huge number, which compares to less than 3 million units in the US at the top of the US real estate bubble. As such, any slowdown is bound to have a substantial impact on the sectors that provide materials for such construction.

The National Bureau of Statistics of China reported that China's non manufacturing PMI seasonally decreased in January. More relevant than the overall decline are some specifics:

The new orders index fell. The new orders index was 48.5%, decreased 2.0 percentage points over the previous month fell below the threshold, which indicated that the demand for non manufacturing market went down.

In view of different industries, the new orders index of construction was below the threshold, showed a seasonal decline, the real estate market continued in downturn trend because of the macro control policies, the market demand of retail trade industry, air transport industry, railway transport industry, road transport industry, and other industries remained high demands.

The subscription price index returned above the threshold. Subscription price index was 51.2%, increased 1.9 percentage points over the previous month, this index returned above the threshold after three consecutive months below 50% which indicated that sales prices of non manufacturing promoted driven by the holiday consumption this month.

In view of different industries, the subscription price of air transport industry, catering industry, lodging industry, rental industry and business services industry gained significantly increased, while that of real estate industry, telecommunications, transport and other information services industry, building and decorating industry and other services industries decreased.

(Sourced from seekingalpha.com)