SAs 2004 unfolded, analysts were watching inventories, which measure the balance between supply and demand, for signs of changing market tightness and thus price movements.
	SInventories were low for the first half of 2004, indicating a tight market, but they were not lower than seen in 2000 or 2003.  Furthermore, 2004 inventories recovered towards year end before falling sharply again.  Yet, 2004 prices rose higher than in either of those prior years.
	SWhat was different?
	SOne difference is the shift in China’s demand.  China’s statistics lie outside of OECD.  It  is possible that some of that market pressure was not reflected adequately in OECD inventories.
	SThe second difference occurred on the supply side, which is shown on the next slide.