Behind the Seams:China GDP, Global Resources

China Focus - 2014 GDP growth forecast cut to 7.5% on a weaker start。

    2014 China growth forecast has been downgraded from 7.8% to 7.5%. While we hadforecast a slowdown in Q1 2014, activity has been weaker than anticipated. The keydownside risks to China's 2014 growth include uncertainties facing its export recovery,credit volatilities related to shadow banking credit event(s) and regulations, and a morepronounced property slowdown.

    Global Resources - Breakeven price for global iron ore producers。

    The iron ore price has moved down sharply this year on concerns about Chinesegrowth, credit availability and talk of financing deals inflating iron ore demand withinChina. We publish analysis of the UBS global coverage universe (following our note onthe Australian resources on 10 Mar). The analysis shows BHP and RIO having the lowestbreakeven price of US$47/dmt cfr, while at the other end is Cliffs with US$103/dmt cfr(wtd ave of Aust-Canada). Vale’s breakeven price is surprisingly high at US$76/dmt cfrdespite having the lowest C1 cost of US$23/wmt. This is due to the high freight rate toChina (US$25/t vs US$10/t from Australia).