COLUMN-Glencore caution, Rio optimism over China? You decide – by Clyde Russell (Reuters U.S. – August 20, 2015)

LAUNCESTON, Australia, Aug 20 (Reuters) – Take two top mining executives and ask them about China. One says he cannot fathom what’s happening in the world’s biggest commodity consumer, the other says he remains unashamedly bullish.

This isn’t an exercise to determine which executive is right and which is wrong, rather it underscores just how difficult it has become to make long-term investment decisions at the current stage of the commodity cycle. Ivan Glasenberg, the outspoken chief executive of Glencore , was candid when presenting the London-listed miner’s 29-percent slump in first half earnings on Wednesday.

“(Commodity demand is) difficult to call at the moment with what we see in China,” Glasenberg said. “That’s the one we are all struggling to read, demand in China.”

Battling to understand the dynamics of President Xi Jinping’s “new normal” isn’t confined to Glasenberg, with views on China currently ranging from the doom and gloom of an imminent hard landing to the more benign gradual, if somewhat disorderly, transition toward a more sustainable, consumer-driven economy.

From Glencore’s perspective, what is known about China’s commodity demand this year isn’t good news, given the company’s high exposure to copper and coal.

China’s unwrought copper imports are down 9.5 percent in the first seven months of the year over the same period in 2014, although imports of ores and concentrates have gained 10.9 percent.

Glasenberg blamed short-selling in China as contributing to the 20.7 percent drop in benchmark LME copper futures from the end of last year to Wednesday’s close.

But better times may be ahead for copper and China, as infrastructure spending increases, the property sector shows signs of stabilising and a weaker yuan may boost manufacturing exports.

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