This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers.

It's China, stupid. We have to stop kidding ourselves that the only reason commodity plays are going down is because of selling by hedge funds. Sure, it's exacerbating and speeding it up and taking it to levels where it may not even matter whether China exists, but it is all China, or more specifically, the absence of China.

Take steel. An article in the

Financial Times

about steel consumption last week stated point-blank that it is going to slow "markedly" in the second half of this year. When you combining tight central banks in Europe -- totally as ridiculous as the tight money in the U.S. while it was obvious what was going to happen -- with China missing from the steel market, you get

U.S. Steel

(X) - Get Report

down into the $80s pretty fast, because you get an inventory buildup quickly, and that leads to an endless series of price cuts as the world was going full-tilt not that long ago. U.S. Steel benefits because at least it didn't lock in sky-high iron ore prices --sell that

Cleveland-Cliffs

(CLF) - Get Report

if you are still in -- but still how do you value a company that could have its earnings cut in half? That's how steel trades.

Now take

Alcoa

(AA) - Get Report

. How tempting it was to think about buying this one now that Ospraie is getting out of the picture. But what happens if China stops buying aluminum? Gregg Greenberg had an excellent interview with the

Molson Coors

(TAP) - Get Report

CEO last week -- you have to watch these news-making interviews

click the video player below -- and he was kind enough to bring management along, which confirmed the falling price of aluminum. The Chinese ain't buying. So the commodity hedge fund that blew up was just wrong anyway.

Molson Coors CEO Bubbly

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I think you will see this across the board, which is why it makes things so hard to buy

Freeport

(FCX) - Get Report

on the way down, as China was the marginal buyer, too.

Now if China comes back, we will look back at these prices as gifts. If they cut rates, we could see a turn quickly.

Without China, though, and given how big commodities are now in the

S&P

, you can get the whole group taking the market down, all a chain reaction to the missing buyer, China.

Judging by the 59% decline in the Shanghai index -- trying to hold there for several nights! -- it is getting reasonable to assume that they are full up with their orders, which makes their inventory work-off incredibly important. My biggest fear as a person who owns FCX is that China simply has way too much and can hold out for a long time -- that's my only non-nat-gas commodity play for

Action Alerts PLUS

, unless you count

Deere

(DE) - Get Report

, which is a beneficiary of lower steel prices.

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So, it's all China, exacerbated by the hedge funds, and we have to keep that in mind when we bottom-fish or when we sell. Right now, the bottom is too deep to fish. At a certain point, the Chinese have to come back, but every day that they don't is another bad day for all commodities, especially anything oil, copper, coal, steel or, concomitantly, infrastructure.

This was originally published on

RealMoney

on September 9, 2008. For more information about subscribing to

RealMoney,

please click here.

TheStreet.com TV: Cramer: Sell Into Sliding Commodities (Sept. 9)

Cramer suggests the commodities are spiraling downward and says investors' best bet is to sell.

To watch the video, click the player below:

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At the time of publication, Cramer was long Freeport-McMoRan and Deere. Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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