Australia’s mining towns may take a hit in the next year, with the Chinese government trimming its GDP growth target to an eight-year low of 7.5 per cent.
The move is raising concerns that China’s demand for raw materials is slowing which will be a blow to the mining industry and the property boom which sent median house prices soaring in many regional towns.
In Smart Property Investment’s ‘Fast 50’, the mining town of Dysart in Queensland had a median price increase of 12.3 per cent over last year, and is geared towards being a major growth town in 2012.
But principals who deal with Dysart properties aren’t worried.
Ian Jensen, of Raine & Horne Mackay, has seen houses which sell for $150,000 rocket well past $300,000. He says he’s still not worried.
“Dysart and the surrounding mines have coking coal which will always be in demand. It’s my understanding that it’s some of the best coking coal in the world. It’ll affect it, but I believe the mining and property industries will survive.”
Chris Laval of Ray White Mackay also thinks the industry is strong enough to cope.
“Demand is that strong that if exports were reduced by up to 30 per cent I don’t think we’ll see any impact. The whole area is supported by the government. We are getting a new export terminal because we can’t export the coal fast enough. If the government is doubling the facilities here in Mackay, I think it’s a safe bet that demand will stay high.”
Lange Steel, a Chinese statistics and research company, says the gross output value of 77 Chinese large and medium-sized steel producers came down by 4.57 per cent year on year and the sales volume stood down by 8.47 per cent year on year in January 2012, which is the first time for double negative numbers of steel industry profit and profit ratio.
The reports are out of sync with projections by the Ministry of Industry and Information Technology (MIIT) who regulate the steel industry in China who late last year reported that annual demand for crude steel will peak sometime between 2015 and 2020.