# Commodity Superboom: Probable reality or unlikely pipe dream?



## TabJockey (11 May 2011)

Not often being one to be critical of the government, labor or liberal, one thing that has struck me about the budget this year is the assumption of continued balance of trade in Australia's favour for many years. The government is assuming that the resources boom will continue for at least 5 years, some have been quoted on figures of 15 to 30 years.

The fundamentals of many resources that Australia has in abundance does look positive but statistically resource booms have not lasted anywhere near 15 years in the past and are usually lucky to last 5 years before increased supply triggers market correction.

Things are "different" today, there is much less of the stuff out there and never have so many emerging economies thirsted for so much metal and coal but similar arguments that "this time things are different" have been heard before in many booms for many hundreds of years and usually close to the apex. Remember, China does not want to have to pay top dollar for our rocks, if they can find an alternative solution they will do so!

Interested in forum oppinion on the likelyhood of a sustained resource boom as the government is assuming.

PS. I am not talking about precious metals which have different fundamental drivers, im talking about the big exports of Coal, Iron Ore and Base Metals.


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## burglar (11 May 2011)

*Re: Commodity Superboom, probable reality or unlikely pipe dream?*



TabJockey said:


> ... Interested in forum opinion on the likelyhood of a sustained resource boom ...




I'm banking on Iron Ore, Manganese and Nickel: major components of Stainless Steel.

When the China story fades, India and Brazil will take over! Just an opinion, mind!


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## TabJockey (11 May 2011)

*Re: Commodity Superboom, probable reality or unlikely pipe dream?*



burglar said:


> I'm banking on Iron Ore, Manganese and Nickel: major components of Stainless Steel.
> 
> When the China story fades, India and Brazil will take over! Just an opinion, mind!




Why do you think Stainless Steel production is so important?

Personally I am pretty bearish on Nickel, if you look into the advances in Nickel Pig Iron technology and just how much Laterite Ore there is out there (especially in Indonesia) it does not paint a great picture. Best case scenario is there is a cieling on Nickel prices of about 22,000US /t and it hovers around there for a while. Worst case is that they find a way to make NPI production even cheaper and Nickel plummets to 10,000 - 12,000 US / t.


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## burglar (11 May 2011)

*Re: Commodity Superboom, probable reality or unlikely pipe dream?*



TabJockey said:


> Why do you think Stainless Steel production is so important?...




'Tis a good story methinks!
As good as peak oil, coal or gas.
Better than Uranium or renewables in my opinion.
And if I'm wrong, I think something might indicate that.
Not to say I'll notice, of course !!


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## DB008 (11 May 2011)

I spoke to a friend who l worked with in WA years ago and he says that there is plenty of construction activity ramping up in WA right now. Basically, if you have the right trade, they'll fly you from anywhere in Oz to WA and give you a big fat paycheck to go as well.


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## So_Cynical (11 May 2011)

Its called a commodity's super cycle...started in the early 2000's

http://en.wikipedia.org/wiki/2000s_commodities_boom

https://www.aussiestockforums.com/forums/showthread.php?t=2170

We have about 10 > 15 years left to run.


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## burglar (11 May 2011)

Peak phosphate:

http://www.abc.net.au/science/articles/2010/08/05/2973513.htm

"... (phosphorus) not going to run out," says McLaughlin, "it's just going to get quite expensive."

Its a great story and it will bite us hard. 
Just don't see it translating into dollars just yet!
Too many $peculator$ absorbed in silver ATM.


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