# Commodities Super Cycle - Do you believe in it?



## RichKid (26 October 2005)

Check out this link and see what you think, it's originally from the ASX frontpage by a UK mining 'expert': "Evy Hambro is one of the world's leading mining analysts. Evy recently gave a presentation on his outlook for global resources..."
http://www.boardroomradio.com/templates/event.jsp?c=311&e=769&m=wmp

Don't forget to use the slides to the right of the movie.

Basically more consolidations, demand continuing, supply tightening, mines take years to come online, prices will rise but not as much as recently, a few co's will control the bulk of supply in the main commodities and hence control prices and prevent the boom bust that has occurred before. 

Only questions are what's the time frame, as nothing goes on forever (remember the Tech wreck?), and how do you take advantage of it? Also more but that's the main part of the thesis imo. This guy really sounds like a polished salesman, you'd walk out and buy shares in his co (GMI an ASX listed investment co).....except you'd be wiser and do your own research first.


----------



## RichKid (1 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

An article on the sector: http://www.smh.com.au/news/business...surefire-winner/2005/12/30/1135915693222.html


----------



## wayneL (1 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

There's certainly precedent for a commodities super cycle Rich.

I've been moving more and more into commodities trading, for several reasons, but one of which is the likelyhood of (if not an outright boom ) at least increased volatilty. 

Another attraction is the non-correlated diversification of risk.

So yes, I'm a believer in the possibility, but don't mind whatever happens. 

Cheers


----------



## RichKid (2 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				wayneL said:
			
		

> There's certainly precedent for a commodities super cycle Rich.
> 
> I've been moving more and more into commodities trading, for several reasons, but one of which is the likelyhood of (if not an outright boom ) at least increased volatilty.
> 
> ...




Hi Wayne,

This is one area where it's interesting to watch analysts as they play catch up, the charts say one thing and the analyst 'models' say something very different. Perhaps they suffer the same psychological defects which  crowds do when they think that prices can't go any higher (eg iron ore, gold, oil); once they finally catch up it's too late.

I think we're fortunate to be in a country like Australia atm as we have a lot of commodity talk in the press, some world class projects and exposure to some great local companies (not as much as in Canada though for juniors).

It's how you ride this that'll determine how profitable it is, there will be ups and downs. Some of the people I pay more attention to fundamentals wise are Doug Casey, Fat Prophets.....and (our very own) Smurf of ASF!!


----------



## RichKid (6 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Another article on the cycle, Access Economics seems to think we've only got another year or two in it, it quotes many forecasters but we all know how often they get it wrong. Still worth noting that there may be cycles within cycles, so we may see a dip before the next big move up, we need to re-assess this from time to time in my view to make sure we don't get too optimistic: http://www.smh.com.au/news/business...r-the-long-haul/2006/01/05/1136387573054.html


----------



## michael_selway (6 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				RichKid said:
			
		

> Another article on the cycle, Access Economics seems to think we've only got another year or two in it, it quotes many forecasters but we all know how often they get it wrong. Still worth noting that there may be cycles within cycles, so we may see a dip before the next big move up, we need to re-assess this from time to time in my view to make sure we don't get too optimistic: http://www.smh.com.au/news/business...r-the-long-haul/2006/01/05/1136387573054.html




I agree and I do believe there will be a correction first

For Oil when the US/Euro/Asia Winter is over (and katrina/rita reocovers fully) we may see oil in the mid to low $US50s/barrel again. However "Peak" oil will be approaching soon, when and not if, some say within 5 yrs some say 30yrs. Good to have an Oil Company in your portfolio during this "correction" for the long haul.

Base Metals there will be a correction in 2008 i think (lasts maybe 1 or 2 yrs, taking Dow Jones/All Ords down with it), prices will probably halve from a peak in demand and supply grows rapidly. However long term it will start an uptrend again. Do u think Africa can be next resources cycle in the future like China now?


----------



## RichKid (10 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

A very bullish piece from Alan Kohler from the ASX website- Investor's Update Newsletter 11Jan2006 (I've extracted the full article elsewhere on ASF, just do a search), just look at those 'valuations', maybe read as 'tips' or 'opinions': 


> The year ahead with Alan Kohler
> 
> Has Australia's golden run ended? After three years of beating the world by investing locally, is it time for investors to leave home? No, says Alan Kohler, publisher of independent investment newsletter, Eureka Report, and commentator with the ABC and John Fairfax. The Australian market is likely to keep producing good returns and to at least be a world-matcher, if not a world-beater (apart from the all-conquering Japanese sharemarket).
> 
> ...


----------



## nizar (10 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

hey richKid,

can u plz post a link to this article (alan kohler), this guy seems 2 b saying everything i wanna hear!

thanks


----------



## michael_selway (10 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				nizar said:
			
		

> hey richKid,
> 
> can u plz post a link to this article (alan kohler), this guy seems 2 b saying everything i wanna hear!
> 
> thanks




Riding the super cycle
By Stephen Bartholomeusz, The Age newspaper
December 20, 2005

THE biggest question mark hanging over 2006 and beyond isn't whether the commodity cycle remains "stronger for longer", but rather just how strong and long the cycle is.

It is evident that there is a China-inspired super cycle in commodities occurring, and that in most commodities there is an imbalance between demand and supply of such proportions that it may take years for the producers to close the gap.

In most of the exchange-traded commodities stocks are minimal, and across the board resource companies are grappling with the logistical issues associated with the attempts to rapidly boost production.

With massive consolidation of the resource sector having occurred in the past decade, the supply-side response to the soaring demand has been more disciplined and cautious than in past resources booms, which helps explain the extent of the price spikes that have occurred.

Despite the massive amount of investment occurring in new or expanded projects, no-one expects the commodity boom to end any time soon, despite expectations that China's growth rate will moderate.

The phenomenal growth in the size of China's economy means that economic growth could slow but demand for commodities would still increase in absolute terms.

The issue of how long the super cycle persists is a critical one for the producers and their investors. For the producers, reading the duration of the cycle will eventually produce big winners and losers from the matching of new capacity with the cycle, and the robustness of the projects themselves. If the cycle remains stronger for even longer, projects that might be considered marginal, on the basis of historical average prices, might well have paid for themselves before prices revert to the mean.

For investors, there is the dilemma of trying to understand whether there are more big gains to come from a continuation of the cycle, or whether they are buying in at the top. Over the next few years the position institutions take in relation to the cycle could be a major differentiator of returns.

The norm for resource companies and fund managers alike is to project the current price framework for the next two or three years and then revert to long-term average prices for their valuations.

If today's conditions persist for longer than than they factor into their models, however, the potential for underinvestment as a consequence of the massive divergence from historical norms is considerable.

UBS recently produced an interesting piece of research that compared its own forecasts of commodity prices and valuations of resource companies with the valuations that would be derived if today's spot prices were sustained.

While in some instances ”” oil, gold and nickel ”” its forecasts for 2006 were above the spot price. For most of the commodities the spot price was considerably higher than its forecast. Incidentally, the UBS house view is that the cycle could be sustained for five years, or more.

Valuing companies using today's spot prices is a purely theoretical exercise, as it assumes the super cycle will last not just longer, but forever. But it does provide an insight into the order of difference in values that could be created if prices take longer to retreat towards long-term averages than the resource companies and their shareholders are anticipating in their modelling.

UBS, for instance, is forecasting BHP Billiton will earn $US9.4 billion ($A12.6 billion) in 2006 and generate $US12 billion of cash flow. If current spot prices were applied to BHP production (large amounts of which are sold at contracted prices) it would earn $US10.33 billion and generate $US12.8 billion of cash flow.

Rio is forecast to earn $US6.4 billion and have cash flow of about $US7.1 billion. At spot prices it would make $US7.3 billion and generate $US7.98 billion of cash.

Applying the spot price to their 2007 results produces even more startling results, with BHP's earnings jumping nearly $US3 billion and Rio's rising by nearly $US2 billion.

When those numbers flow through to UBS's valuations of the resource companies' shares, the potential for misjudgments of value becomes obvious.

On UBS's 2005 forecasts, it valued BHP at $18.61. Feed the spot prices into the valuations and BHP would have been worth $43.86. Rio was valued by UBS at $51.21; at spot prices it would be valued at $109.51. Zinifex, now trading $6.21 a share, was valued on the basis of its forecast 2005 results at $3.74. At spot prices it would be worth $11.09 a share. Alumina, trading around $6.90 a share, would be worth $12.10 a share.

On the basis of the forecast numbers, BHP and Rio are selling at about 10 times their 2006 earnings, which isn't itself an aggressive treatment by the market and suggests a considerable degree of caution about the sustainability of the prices and profits. The low pay-out ratios ”” the resource heavyweights pay out less than 30 per cent of their earnings as dividends (they have both returned capital, which is a way of rewarding shareholders without making a long-term commitment to higher dividends) ”” suggest the companies are as conservative about their outlook as the market.

The UBS research, while theoretical ”” if prices were sustained at their spot levels indefinitely inflation levels would inevitably rise, with consequences that would probably undermine the cycle ”” does give a broad feel for the amount of value and/or the opportunity cost at stake in assessments of the duration of the China phenomenon on commodity prices.


----------



## wayneL (18 January 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Hi folks,

Rediscovered Jim Puplava's Financial Sense Newshour recently (thanks WaySolid )

If anyone is interested further in commodities, and in particular the commodities supercycle check out this interview with Jim Rogers on the topic:

http://www.financialsense.com/Experts/2005/Rogers.html

The commodities markets are more than just metals and energy. This interview also highlights the other commodities markets such as soybeans, pork bellies, orange juice, sugar, etc etc etc

Cheers


----------



## Ann (2 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Hi Guys,

I don't quite know where to put this link but this seems as good a place as any.

It is a link about the Supply Side of Mineral Economics.......

http://corporate.bmo.com/publications/basicPoints/default.asp?id=6197


Enjoy......


----------



## michael_selway (2 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				Ann said:
			
		

> Hi Guys,
> 
> I don't quite know where to put this link but this seems as good a place as any.
> 
> ...




Hi Ann thanks, can u pls give us a bit of a summary and what u think?

thx

MS


----------



## Ann (3 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Hi Michael,

I found it a nice bit of light, interesting reading. I don't buy mining companies of any description so I only have a very limited interest in the commodities, other than the pleasure of drawing charts for others. A good way to offer totally unbiased charting by the way. However, being aware that there is a tremendous amount of interest in this subject, anything I find that may be of value to others, who do have a greater understanding, I try to make sure it is not missed but given a good home! 

How was that for a cop out?  :


----------



## nizar (5 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				Ann said:
			
		

> Hi Michael,
> 
> I found it a nice bit of light, interesting reading. I don't buy mining companies of any description so I only have a very limited interest in the commodities, other than the pleasure of drawing charts for others. A good way to offer totally unbiased charting by the way. However, being aware that there is a tremendous amount of interest in this subject, anything I find that may be of value to others, who do have a greater understanding, I try to make sure it is not missed but given a good home!
> 
> How was that for a cop out?  :




Thanks for posting that link...

great stuff... bank of montreal...

merril lynch upgrading commodities prices... MS this is only a few paragraphs maybe u should try reading it instead of asking for a summary...  :  lol joke...

http://www.bloomberg.com/apps/news?pid=10000086&sid=aE5COv6.WH7g&refer=latin_america

ann u should seriously think of getting into some miners... my picks are wpl and bhp... wpl is a bit overpriced... but bhp looks good... oil+uranium means u cant go wrong in the long term....


----------



## michael_selway (5 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				nizar said:
			
		

> Thanks for posting that link...
> 
> great stuff... bank of montreal...
> 
> ...




Thanks guys    



> The price of copper, used in pipes and wires, may average $2 a pound in 2006, 21 percent higher than a previous forecast, Merrill said. The metal has averaged $4,856.60 a ton, or $2.20 a pound, this year on the London Metal Exchange.
> 
> ``Demand has surprised on the upside in key Chinese and Indian markets,'' said Binns. ``This has combined with supply bottleneck at the smelters to switch our small surpluses in 2006 into small deficits.''
> 
> ...


----------



## nizar (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Boomtime for commodities

William R. Thomson
March 9, 2006

Roundtable Business Times Singapore
 ©2006 Singapore Press Holdings Limited

OVERVIEW

COMMODITY markets are bullish - and have been for at least five years. Are we near the end of the upward cycle, or is it just beginning? This week we bring together some of the best brains in the business to answer those questions and to tell investors where they should be putting their money if they want to profit from the commodities boom.

PARTICIPANTS in the roundtable

Moderator: Anthony Rowley, BT Tokyo Correspondent.

Panelists:

James ('Jim') Rogers, head of his own commodity investment firm, Rogers Holdings, and a global expert on commodities. He is a former co-investor with George Soros.

Marc Faber, investment adviser and publisher of the 'Gloom, Boom and Doom Report.'

William Thomson, chairman of Private Capital Ltd, Hong Kong and senior adviser to Franklin Templeton Institutional Hong Kong and Axiom Opportunities Fund, London.

Anthony Rowley: We're pleased and privileged to have world-renowned commodities expert Jim Rogers joining us today - along with two old friends and savants of the investment world, Marc Faber and William Thomson. A warm welcome to you all.

Jim, I know you have insisted that your two-year-old daughter, Happy, should become bilingual in English and Mandarin, because you believe Chinese is the language of the future - and also that you have already put her into commodities. Is that because you think commodities are the investment of the future?

Jim Rogers: I just wrote a whole book on the subject. Historically, every 25 or 30 years we've had a long multi-year bull market (in commodities) followed by a long multi-year bear market. In my view, we're now in a new bull market. If history is any guide, this bull market will last until sometime between 2014 and 2022. That is not a prediction - just a reflection of past historical cycles. Essentially (what is driving it) is the imbalance of supply and demand similar to imbalances that have recurred regularly for centuries.

Throughout history, there have been bull markets in raw materials every 20 to 30 years. Supply and demand regularly get out of balance, leading to recurring periods of rising (and declining) prices. Virtually no one has built an offshore drilling rig, or opened a lead mine, or developed a sugar plantation during this period. Quite the opposite; productive equipment has deteriorated, been cannibalised, or s********ped while other capacity has closed.

Raw materials should always be represented in any diversified portfolio. Stocks, bonds, cash and real estate do not provide sufficient representation of the world's economy, nor sufficient non-correlation to each other.

Anthony: Let's talk about the background to the current bull market in commodity prices, and where we see it going from here. Marc, what's your view?

Marc Faber: Commodities were in a more than 20-year bear market between 1980 and 2001. Since then, industrial commodity prices especially have risen sharply as the incremental demand from China shifted the demand curve to the right. However, inflation adjusted commodity prices are still very depressed. This would especially apply to the agricultural commodities.

Usually, commodity cycles, also known as Kondratieff cycles, last 45 to 60 years from peak to peak. Since the last peak was in 1980, I would expect this cycle, which began in 2001, to last until between 2025 and 2040.

William Thomson: Each decade seems to have an overwhelming investment theme. The Eighties were all about Japan and in the Nineties it was high-tech. I expect the 'Noughties' to be the decade for commodities. After a 20-year bear market from 1980 to 2000, commodities should enjoy a recovery period that should last at least 10 years and could extend to 20 years.

It is powered by the totally mind-blowing growth in demand that is coming from the world's emerging economies led by India and China. The industrialisation of these two population giants is leading to the greatest shift in global economic power since the industrialisation of first, Great Britain 200 years ago, followed by the United States 100 years ago.

To put this in perspective, in 1820 Asia represented about 40 per cent of world GDP. By 1950 it had fallen to 18 per cent and has since recovered to over 30 per cent. The Asian Development Bank and Harvard estimate that Asia's share of world GDP should be over 40 per cent again by 2020.

So, in fact, Asia is just in the process of reestablishing its historic place in the world economy. This is the vital underpinning to the commodity demand bull story. Supply inevitably lags in its response to these increased demands in the early years.

Anthony: Which commodities do you feel hold out the best promise for further price gains - and why?

Jim: I would be doing research in the agricultural area as this is where there may be new opportunities. Many of them (agricultural commodities) are still far, far below their all-time highs while the fundamentals are changing for the better.

William: My knowledge is of the energy and minerals markets and, as noted, I believe there is plenty of opportunity there in the coming years. The soft commodities have lagged but I suspect they will now play catch up. After all, there has been the same lack of investment in these assets for many years while demand grows in the emerging economies.

Institutional funds will also increasingly try to access these commodity markets as they seek to diversify away from overpriced equity and fixed income markets.

Marc: Grains are the most inexpensive commodities. They are at a 200-year low against oil. I also think that gold and silver are still very inexpensive, when compared to the US dollar and to the Dow Jones Industrial Average.

Anthony: Talking of that, Marc, how much further do you think gold, platinum and silver prices have to go in this cycle?

Marc: In your lifetime, I believe investors will be able to buy one Dow Jones Industrial Average with less than five ounces of gold. So, depending on how much money the US will print, gold will either outperform equities on the upside or decline less than equities in a bear market. My target is for gold prices to rise to between US$5,000 and US$10,000 in the next 10 years.

Anthony: Are you equally bullish on these metals, Jim?

Jim: In bull markets, nearly everything eventually goes to a new all-time high and usually multiples above the old all-time highs. Gold and silver should too. Platinum is already there, but if you adjust its old highs for inflation, it too might have further to go over the course of this long bull market. Ask me again in 2018.

William: Much depends on how the growing geopolitical dangers develop in the coming years. However, even without significant global disruptions, I have stated before that US$1,000 an ounce gold should be attainable and, if we have major problems with war or inflation, then US$2,000 to US$3,000 can be envisaged since it would only be the equivalent of US$860, the high in 1980, in today's money.

Along the same lines US$20 to US$30 silver and US$100 to US$150 oil seems possible over the next half decade. It could even be worse if we fall into a situation where nuclear weapons are being used.


----------



## nizar (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

CONTINUES FROM ABOVE...

Anthony: All well and good, but commodity markets have been rather volatile lately, which may scare off some investors. What's behind this?

Jim: Nothing goes in one direction all the time. There are always corrections and consolidations in every bull and bear market in every asset class - especially in the long secular markets on which I try to focus. For example, in the long stock bull market from 1982 to the end of the 1990s, shares went down 40 per cent in 1987 and had other serious setbacks in 1989, 1990, 1994, 1997, 1998, etc, yet the secular trend was up. Things that shoot straight up for a while are especially prone to consolidations and need them to ensure the bull move lasts a long time.

William: Bull markets tend to run in phases moving from complete indifference or even revulsion to the class, as happened with commodities at the end of their 20-year bear markets around 2000, through disbelief as prices crawl off the floor amid early professional accumulation, and then a gradual recognition that circumstances have changed.

This, in turn, generates further speculative interest and flows both in the financial markets and real investment. Finally, the public is convinced that we are in a new perpetual bull market and a new way for everyman to secure his financial future is upon us as happened at the end of the dotcom, high-tech boom in the late 1990s as the last commodity bear market was finishing.

We have had two years of strong commodity markets, especially energy and minerals, on the back of surging demand from emerging economies and a recovery in the US with little or no increase in supply. The growing enthusiasm for the class has generated an over-bought situation short term and the need for a normal consolidation of prior price gains in the face of a maturing economic recovery in the US where the Fed has been increasing interest rates for over 18 months.

This is perfectly normal as the market digests the gains and attempts to assess supply and demand balances going forward. Geopolitical considerations will play an important role in this process as countries such as India and China attempt to assure future access to oil and other commodities in a less stable world where the US seems increasingly willing to pay any price to try and assert its hegemony over the Islamic world.

Once this period of digestion is over, then I expect prices to move up again. This could happen any time if the conflict between the US and Iran escalates in the coming weeks and months, as I fear it will.

Marc: As in other asset markets, approximately 20 per cent of the price gains can be attributed to speculative demand and not end-user demand. Speculators began to take some profits and, therefore, prices of aluminium, zinc and lead have come off by respectively 13 per cent, 15 per cent and 19 per cent from their highs. In addition, it is likely that industrial commodity prices underwent some kind of short squeeze recently - this especially for copper.

Anthony: How can individual or 'retail' investors best access these markets?

Jim: Academics, consultants, and banks have confirmed repeatedly that index investing outperforms active investing 80 per cent of the time year after year so stick with a good index. If you find a great active manager, give him your money and introduce him to me too. The chances we will find that manager early are very slim. If an investor knows a great deal about a commodity or commodities, he can invest himself after he has done a lot of homework.

Anthony: You have developed your own commodities index, the Rogers International Commodity Index. This is not an investment fund as such but it does provide investors with a way of gaining diversified exposure to the markets. Can you tell us a little more about it?

Jim: The Rogers International Commodities Index (RICI) was designed to meet the need for consistent investing in a broad-based international vehicle. Thirty-five commodities are represented in the RICI. This gives it breadth just as the S&P 500 is broader than the Dow Jones Industrials. International commodities are represented, whereas most other indices are regional or US-oriented. For example, other indices exclude rice, the staple food of a large percentage of the world. All commodities in the RICI are publicly traded on recognised exchanges to ensure ease of tracking and verification.

Anthony: Marc and Bill, how do you recommend accessing commodity markets?

Marc: For the individual investor, the easiest is to buy precious metals including gold, silver and platinum. There are certificates on other commodities but the costs associated with these certificates are fairly high. All commodities can be bought in the futures market and individuals could also buy shares of companies involved in oil, gold, uranium and plantations.

William: The investor's knowledge base will affect his chosen instruments. Some will want to invest directly in the producers such as the oil and mining majors, for instance, Exxon and BHP Billiton; some the juniors and the explorers while others will prefer to go through mutual funds and investment trusts. The more speculative might even try to invest directly in commodity futures - not that I am recommending they try it.

These are the traditional investment instruments. However, today we are fortunate in having others, especially exchange traded funds (ETFs), hedge funds and funds of hedge funds. Dozens of ETFs are available in the US and elsewhere. The number is expanding all the time. Some that are of interest just track the gold price and, shortly, silver. Another is the Goldman Sachs commodity index and yet another an index of the oil majors. They are an efficient, low cost way to invest on a trend.

Hedge funds and funds of hedge funds promise diversification and reduced volatility since they can go short as well as long and can invest over a variety of strategies, for instance, commodity trade finance, that are not available to the individual investor but promise steady above average returns. For some investors they will represent an important opportunity within a diversified portfolio.

Anthony: Any other comments, gentlemen, on investment in commodities?

Jim: The same as for every investment. Do nothing unless and until you have done a lot of homework. I might add that Singapore should be developing commodity markets of its own. I hope it will.

William: As with all investment themes I see commodities eventually going to excess levels, driven by speculative institutional funds. I also expect it to be a much more volatile ride than it has been to date.

Marc: International tensions are rising and nothing drives commodities as strongly upward as a war.

Anthony: And on that rather sobering note, we must end. Thank you all again for coming - and may your pickings be rich!


----------



## michael_selway (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				nizar said:
			
		

> Anthony: Which commodities do you feel hold out the best promise for further price gains - and why?
> 
> Marc: Grains are the most inexpensive commodities. They are at a 200-year low against oil. I also think that gold and silver are still very inexpensive, when compared to the US dollar and to the Dow Jones Industrial Average.
> 
> ...




hm they seem so bullish on Gold, but their time frames seem very long for those price forecasts


----------



## kevo (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

CRB is 30% of its eventual highs. Gold will be 1000 +, Silver 20+. Copper $3.00 a pound, lead 2.00 a pound. I think lead, corn and sugar are the next big movers. Time to buy MMN, OXR and Bolinski Gold is monday. Correction is over.  I got a few items at http://blog.kontentkonsult.com and www.kontentkonsult.com you guys might like to read. I most bullish on SSM and PDN. The uranium bull has just begun.


----------



## michael_selway (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				kevo said:
			
		

> CRB is 30% of its eventual highs. Gold will be 1000 +, Silver 20+. Copper $3.00 a pound, lead 2.00 a pound. I think lead, corn and sugar are the next big movers. Time to buy MMN, OXR and Bolinski Gold is monday. Correction is over.  I got a few items at http://blog.kontentkonsult.com and www.kontentkonsult.com you guys might like to read. I most bullish on SSM and PDN. The uranium bull has just begun.




Hi may i ask why u think Copper/Lead will reach those prices? also whats the time frame? Also what does CRB mean?

Reason i ask is that LME supplies for those have been increasing in the last 12 months (supply exceeds demand)?


----------



## bvbfan (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

CRB is the commodity research bureau, this is how it is calculated presently


----------



## rederob (12 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> Hi may i ask why u think Copper/Lead will reach those prices? also whats the time frame? Also what does CRB mean?
> 
> Reason i ask is that LME supplies for those have been increasing in the last 12 months (supply exceeds demand)?



MS
CRB is the Commodity Research Bureau:  http://www.crbtrader.com/crbindex/data.asp

In relation to copper, be careful believing what you see.  There is virtually no copper available in an LME warehouse within 5000 miles from london - it's all in Asia, plus a bit on the West Coast of USA.  Copper is being delivered by China's SRB into Asian warehouses to meet rolled over positions after one of their traders got caught short.  Therefore, we can expect much of what is visible in Asia to be "cancelled" (or delivered) in a few months.

I don't think lead is ready to rocket just yet, and there is a chance aluminium will beat it - despite both metals having considerable deliveries into warehouses in recent months.  Aluminium is in a better position because high power prices are leading to a string of plant closures across the globe.
Zinc has to be the favourite to continue rising strongly this year - it is the only metal with both a fundamental supply side deficit and continuing robust demand.


----------



## nizar (17 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

http://www.bloomberg.com/apps/news?pid=10000081&sid=adpLQtqjlP6E&refer=australia

Commodity Strategists: Rally to Resume, Lehman Says (Update1) 
March 16 (Bloomberg) -- Commodity prices will resume a four-year rally after falling since January, underpinned by economic growth and higher energy prices, Lehman Brothers Holdings Inc. strategist Jack Malvey said. 

Commodities including natural gas, lead, sugar, oil, zinc and gold have fallen over the past two months, sending the broader Reuters/Jefferies CRB Index down 7 percent since Jan. 30. It gained about 17 percent in 2005 and 71 percent since 2001. 

``Growth, geopolitical risk and potentially higher energy prices point to the possibility of another rise in commodity prices,'' Malvey, Lehman's New York-based chief global fixed- income strategist, said today in an interview. ``It's too early to conclude that the upward ascent has ended. We are more likely in the midst of a pause.'' 

Natural gas futures have fallen the most, dropping 37 percent this year to less than half the value of records reached in December. Reduced demand for heating during a mild U.S. winter allowed inventories to rise. Gas soared 83 percent last year. 

Gas in New York today was at $7.19 per million British thermal units at 10 a.m. local time. That's down about 55 percent from a Dec. 13 peak of $15.78. The price in 2004 averaged about $6.18 per million Btu. 

Prices for commodities, as measured by the CRB index, have rallied for six of the past seven years. The measure fell in 2001. 

``The first quarter of 2006 will more likely be recalled as merely a deceleration along a multiyear commodity expansion, one that's already demonstrated stops and starts during a broad upward trajectory,'' Lehman analysts including Malvey wrote in a report dated yesterday. 

`Pure Play' 

Malvey said in the interview he doesn't expect this year's ascent in the CRB index to match that of 2005 or the 11 percent gain in 2004. Commodity prices could even move lower for ``one or two or three months'' before rising again later in the year, he said. 

A Lehman survey yesterday found that 38 percent of respondents buy commodities to diversify from stocks and bonds, said Joseph Di Censo, 30, a fixed-income strategist and co- author of the Lehman report, in a separate interview today. Twenty-five percent said inflation is their primary reason, and 19 percent said they buy commodities as a ``pure play.'' 

Gold Rally 

Lehman isn't alone in predicting a rebound in the commodity. Merrill Lynch & Co. commodity strategist Francisco Blanch said in a March 10 report that gas futures will rebound to $10 in December as U.S. economic growth spurs demand from industrial users. 

Gold futures prices sank 4.7 percent last week, the biggest decline for a calendar week in 15 months, as a strengthening U.S. dollar eroded the appeal of the precious metal as an alternative investment to U.S. assets. The metal has risen this week, with the April contract at $552 an ounce at 10 a.m. New York time. 

The precious metal may rally in coming months as central banks reduce sales of bullion reserves, New York commodity researcher CPM Group said last month in its annual outlook report. Gold reached a 25-year high of $579.50 on Feb. 2. 

Renewed interest in commodity-based returns will underpin the next stage of the rally, the Lehman note said. 

Commodity Exposure 

``With pension funds and individual investors keen to address the lack of commodity exposure in their portfolios, the re-discovery of this ancient and not-so-alternative asset class should help sustain the first great commodity uplift in three decades,'' Malvey, 54, and the Lehman analysts wrote. 

Malvey, a Chartered Financial Analyst who received a bachelor's degree from Georgetown University, has also worked for Kidder Peabody and Moody's Investors Service. He is a former president of the Fixed Income Analysts Society. 

The price for lead, used to make rechargeable batteries, has dropped amid forecasts supply will catch and surpass demand this year. World production may rise 5.7 percent to 7.73 million tons in 2006, while consumption may increase 4 percent to 7.71 million tons, Stephen Briggs, an analyst in London at Societe Generale SA, said last month. Production grew 7 percent last year, compared with a 3.3 percent expansion in demand. 

Lead has fallen 18 percent since reaching a record on Feb. 3. 

Buying by investment funds had boosted lead prices earlier this year, Briggs said in a Feb. 10 interview. ``We are seeing huge amounts of new money being invested in commodities, distorting the fundamentals,'' he said. ``It's a bubble, in my view.''


----------



## crackaton (17 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Silver is going ballistic and will be the place to be. I reckon there's a chance it could get to 100$ in the not too distant future!!


----------



## michael_selway (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				crackaton said:
			
		

> Silver is going ballistic and will be the place to be. I reckon there's a chance it could get to 100$ in the not too distant future!!




why is silver going that high currently? is it linked with gold? or can it go higher?

thx

MS


----------



## crackaton (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

EFT coming up. Everyone buying. Just wait and see. Buy any stocks remotely associated with silver or physical if you can. Happy days ahead.

My uneducated opinion though, so don't mortgage the house.


----------



## nizar (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> why is silver going that high currently? is it linked with gold? or can it go higher?
> 
> thx
> 
> MS




Silver is going higher due to buying by investment funds. When silver goes up, it can pull up the gold price according to article below. Wow look at zinc, 1.11 and looking very strong   

http://economictimes.indiatimes.com/articleshow/1450196.cms

Silver shoots up to new 22-yr high, pulls gold up 

THURSDAY, MARCH 16, 2006 12:50:34 AM] 

LONDON: Silver rose sharply in Europe on Wednesday on renewed investment buying, with prices notching up a new 22-year peak at $10.40 an ounce on ongoing talk an exchange-traded fund will be launched soon, dealers said. Silver’s strength filtered through into other precious metals, pulling the usual market-leader gold higher, as well as platinum and palladium. 

“Silver continues to be supported by resilient fund interest and a nervous marketplace,” Barclays Capital said in a daily report. The white metal has jumped by some 16% since the end of last year, initially tracking firm gold prices but then showing independent strength on speculation about the launch of a new investment product. “Indeed, another push lower in the gold/silver ratio is still possible, with the next target level around the April ’04 low of 51,” Barclays said. The ratio, which represents how many ounces of silver are needed to purchase one ounce of gold, is currently around 54. 

By afternoon, spot silver stood at $10.33/10.36, up from New York’s $10.20/10.23 on Tuesday.In the US market, benchmark silver futures too rose to their highest in more than 22 years on Wednesday as investors bought amid speculation about the launch of a new US silver investment product. In New York, silver for May delivery rose 11.5 cents to $10.36 an ounce, the loftiest level since October 1983. 

“Although silver seemingly is gathering strong investor interest, focus still remains on the decision by the US Securities and Exchange Commission on Barclay’s silver ETF,” Standard Bank said in its report.It was referring to the new Barclays Global Investors exchange-traded fund that is awaiting approval by US financial authorities. Analysts have said the Barclays product might attract 4,000 tonnes of silver in the first phase as the product would be backed by the physical commodity. 

Gold ETFs, launched in the past three years, have seen a big increase in popularity in recent months and five such funds worldwide have so far collected some 467 tonnes of gold ”” equivalent to the 12th largest gold holding by a central bank. Despite the recent euphoria surrounding silver, the outlook for the metal, also used in industrial applications, is dimming due to oversupply after a downturn in its use in photographic film as digital technology grows in popularity. 

Gold was nibbling at one-week highs, with traders looking for a possible test of the upper end of its recent $540-560 an ounce trading range. Spot was quoted at $556.10/ 556.80, against $551.60/ 552.30 on Tuesday, when it rose 1% on speculative buying, supported by the dollar’s steep fall.Meantime, major commodity markets including bullion remained closed in Mumbai on Wednesday for Holi festival.


----------



## nizar (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> why is silver going that high currently? is it linked with gold? or can it go higher?
> 
> thx
> 
> MS




Read whats in bold

http://jang.com.pk/thenews/mar2006-daily/16-03-2006/business/b11.htm

Silver eyes 22-year high, gold flat

LONDON: Silver climbed in Europe on Wednesday as investors bought, taking the volatile market within reach of a recent 22-year peak at $10.31 a troy ounce.

Gold was little changed, slipping back after an early run to a one-week high, with traders looking for a possible test of the upper end of its recent $540-560 an ounce trading range.

Silver has jumped by some 16 per cent since the end of last year, initially tracking firm gold prices but then showing independent strength on speculation about the launch of a new investment product.

By 1104 GMT, spot silver was at the day’s high of $10.24/10.27, up from New York’s $10.20/10.23.

*"Although silver seemingly is gathering strong investor interest, focus still remains on the decision by the US Securities and Exchange Commission on Barclay’s silver ETF," Standard Bank said in a daily report.

It was referring to the new Barclays Global Investors exchange-traded fund that is awaiting approval by the US financial authorities.

Analysts have said the Barclays product might attract 4,000 tonnes of silver in the first phase as the product would be backed by the physical commodity.*

Gold ETFs, launched in the past three years, have seen a big increase in popularity in recent months and five such funds worldwide have so far collected some 467 tonnes of gold - equivalent to the 12th largest gold holding by a central bank.

Despite the recent euphoria surrounding silver, the outlook for the metal, also used in industrial applications, is dimming due to oversupply after a downturn in its use in photographic film as digital technology grows in popularity.

Spot gold was flat at $551.50/552.25 against $551.60/552.30 on Tuesday, when it rose one per cent on speculative buying, supported by the dollar’s steep fall.

"Gold is steady and doing what it should be doing," said Tony Dobra of Commerzbank’s precious metals sales team, adding it was in the middle of its $540-560 trading band. "It’s a more stable market and in the long run I think that is much better."

Gold has tracked moves by the dollar and oil prices more closely in recent days. Further dollar weakness would lift gold, while lower oil prices might trigger sales.

Analysts expected the status quo to persist for now, while Japanese investors, who have been among the market’s major drivers this year, stayed on the sidelines.

Gold hit a 25-year high of $574.60 in early February mainly on strong investment demand from Japan. But as the Bank of Japan recently signalled it was ending its ultra-loose monetary policy, some analysts said this might put an end to the so-called yen carry - a popular strategy in financial markets whereby speculators borrow in yen at a zero interest rate and invest in higher-yielding instruments or those expected to increase in price, such as gold.

"Rallies in the yen in anticipation of the bank’s change in policy have more than once coincided with falls in the price of gold," Stephen Briggs, metals economist at SG Corporate and Investment Bank, said in a recent report.

Commerzbank Dobra added: "The biggest influence in the market at the moment is what happens to the yen...gold really took off when the Japanese started buying."

Platinum group metals were also firmer, with platinum at $1,027/1,032 an ounce against $1,019.50/1,023.50 in New York. Palladium rose to $305/309 from $302/306 an ounce.

The metal is at its highest since the start of the month and testing the top end of a five-week trading range.


----------



## crackaton (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

"Despite the recent euphoria surrounding silver, the outlook for the metal, also used in industrial applications, is dimming due to oversupply after a downturn in its use in photographic film as digital technology grows in popularity."

Um that was the case some years back. With old photography a lot of the stuff was recycled, nowdays it is being used for a lot more things, other than happy snaps.

Am I wrong on this?


----------



## michael_selway (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				crackaton said:
			
		

> EFT coming up. Everyone buying. Just wait and see. Buy any stocks remotely associated with silver or physical if you can. Happy days ahead.
> 
> My uneducated opinion though, so don't mortgage the house.




crack do u know any silver specialists?

ZFX has silver but zinc is its major business

thx nizar btw for the info

MS


----------



## crackaton (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> crack do u know any silver specialists?
> 
> ZFX has silver but zinc is its major business
> 
> ...




ZFX also have silver as an aside, also copper and lead and some gold ( I think?).

No Australian silver producers. MMN and BSG are supposedly about to reach product.

Other guys are American and they have the most. From memory Silverado, and there's a Canadian one as well.


----------



## nizar (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> do u know any silver specialists?




These are stocks with interests in Silver mining.
AS at 19/08/05

MMN - MACMIN SILVER LTD - Shares Issued 358,337,802 Market Capitalisation 39,417,158
http://www.macmin.com.au/

DRK - DRAKE RESOURCES LIMITED - Shares Issued 16,465,000 Market Capitalisation 2,552,075
http://www.drakeresources.com.au

BSG - BOLNISI GOLD NL -Shares Issued 276,587,321 Market Capitalisation 217,121,046
http://www.bolnisigold.com.au/

CBH - CBH RESOURCES LIMITED - Shares Issued 504,708,756 Market Capitalisation 138,794,907
http://www.consbh.com.au/

LEG - LEGEND MINING LIMITED - Shares Issued 278,578,322 Market Capitalisation 27,579,253
http://www.legendmining.com.au

NIQ - NIQUEST LIMITED - Shares Issued 21,968,701 Market Capitalisation 4,723,270
http://www.niquest.com.au/

MAR - MALACHITE RESOURCES NL - Shares Issued 54,078,480 Market Capitalisation 5,678,240
http://www.malachite.com.au/

JML - JABIRU METALS LIMITED - Shares Issued 173,132,405 Market Capitalisation 34,626,481
http://www.pilbaramines.com.au/

BOC - BOUGAINVILLE COPPER LIMITED - Shares Issued 401,062,500 Market Capitalisation 300,796,875
www.bougainvillecopper.com.pg

CWG - CENTRAL WEST GOLD NL - Shares Issued 16,193,556 Market Capitalisation 1,619,355
www.centralwestgold.com.au/

EUG - EUROGOLD LIMITED - Shares Issued 217,679,494 Market Capitalisation 31,563,526
http://www.eurogold.com.au/

TAM - TANAMI GOLD NL - Shares Issued 379,888,902 Market Capitalisation 43,687,223
http://www.tanami.com.au/

KMN - KINGS MINERALS NL - Shares Issued 317,129,280 Market Capitalisation 65,011,502
www.kingsminerals.com

LAF - LAFAYETTE MINING LIMITED - Shares Issued 506,368,426 Market Capitalisation 91,146,316
http://www.lafayettemining.com

MML - MEDUSA MINING LIMITED - Shares Issued 25,841,192 Market Capitalisation 17,572,010
http://www.medusamining.com.au/

UCL - UNION RESOURCES LIMITED - Shares Issued 507,153,555 Market Capitalisation 18,764,681
http://www.unionresources.com.au/

GGY - GLENGARRY RESOURCES LIMITED - Shares Issued 157,883,938 Market Capitalisation 7,420,545
http://www.glengarrynl.com.au/

MTN - MARATHON RESOURCES LIMITED - Shares Issued 32,567,895 Market Capitalisation 17,260,984
http://www.marathonresources.com.au

SAR - SARACEN MINERAL HOLDINGS LIMITED - Shares Issued 75,846,314 Market Capitalisation 6,750,321
N/A

PEM - PERILYA LIMITED - Shares Issued 186,522,239 Market Capitalisation 139,891,679
http://www.perilya.com.au/

PIO - PIONEER NICKEL LIMITED - Shares Issued 49,692,434 Market Capitalisation 10,932,335
http://www.pioneernickel.com.au

TZN - TERRAMIN AUSTRALIA LIMITED - Shares Issued 42,142,946 Market Capitalisation 16,014,319
http://www.terramin.com.au/

GSE - GOLDSEARCH LIMITED - Shares Issued 183,209,348 Market Capitalisation 6,595,536
www.goldsearch.com.au

TAS - TASMAN RESOURCES NL -Shares Issued 102,967,510 Market Capitalisation 18,019,314
http://www.tasmanresources.com.au

KCN - KINGSGATE CONSOLIDATED LIMITED - Shares Issued 85,880,629 Market Capitalisation 280,829,656
http://www.kingsgate.com.au/

RWD - REWARD MINERALS LTD - Shares Issued 27,084,077 Market Capitalisation 4,739,713
http://www.rewardminerals.com

Taken from http://www.e-cbd.com/108418.php

Courtesy of Ann


----------



## rederob (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

nizar
A few mentioned above mine silver as by-product, many mentioned are just hopeful explorers, while MMN mines silver as primary ore and is nearing its first output.
Ann's list missed BHP which has the world's largest silver mine at Cannington.
The hard yards is in reading who does what and how well.
The proposition to bear in mind is that silver in the ground ("reserves") is likely to be mined at a significant premium over present prices as the deficit in this metal grows.
Some months ago when I was looking at the numbers for MMN I used AU$12/oz as a basis: Given silver is now over $14 it makes a huge difference to the company's profitability when working on numbers suggestive of total output around 50moz.  Given that MMN has just under 500m shares and options on offer, the maths on the company while it is under 40cents/share are pretty good.


----------



## crackaton (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				rederob said:
			
		

> nizar
> A few mentioned above mine silver as by-product, many mentioned are just hopeful explorers, while MMN mines silver as primary ore and is nearing its first output.
> Ann's list missed BHP which has the world's largest silver mine at Cannington.
> The hard yards is in reading who does what and how well.
> ...





tend to agree. Silver is moving very close to 20$ US. Interesting times. Also don't forget BSG


----------



## michael_selway (18 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				crackaton said:
			
		

> tend to agree. Silver is moving very close to 20$ US. Interesting times. Also don't forget BSG




Hi thx, also do u knwo if there are any sites that show how much Silver/Gold supplies there is out there and their movements daily?

Eg. the one below from kitco is for base metals

http://www.kitcometals.com/charts/lmewarehouse.html

thx

MS


----------



## rederob (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> Hi thx, also do u knwo if there are any sites that show how much Silver/Gold supplies there is out there and their movements daily?
> thx
> MS



MS
There are many storages of metals - base and precious - so you need to look widely to get a feel for what is happening.
Your Kitco site reference only shows LME and COMEX for base metals, but there is also Shanghai.  On top of that most producers and consumers carry inventory that remains unreported.
In relation to gold, the greatest quantities available remain in Central Bank vaults.
You can get an idea of what is available at NYMEX depositories via this link: http://www.nymex.com/index.aspx - just hunt for the "warehouse stocks" tab.
Google search and you will find more locations that give you an idea of what's around.
Good luck


----------



## michael_selway (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				rederob said:
			
		

> MS
> There are many storages of metals - base and precious - so you need to look widely to get a feel for what is happening.
> Your Kitco site reference only shows LME and COMEX for base metals, but there is also Shanghai.  On top of that most producers and consumers carry inventory that remains unreported.
> In relation to gold, the greatest quantities available remain in Central Bank vaults.
> ...




Hi thx

Yeah i have noticed for base metals theres a few major supply warehouses LME, NYMEX (comex) and Shanghai.

http://www.nymex.com/cop_fut_wareho.aspx
http://www.nymex.com/alu_fut_wareho.aspx
http://www.kitcometals.com/charts/nymexwarehouse.html

no charts for the nymex site but for copper/aluminium nymex, the kitco site reconciles with the nymex site

Theres also Silver and Gold nymex warehouse yes

http://www.nymex.com/sil_fut_wareho.aspx (125890562 Troy Ounce as at 17/03/06)
http://www.nymex.com/GC_wareho.aspx (7,525,605 Troy Once as at 17/03/06

Also interesting is the current price futures out to 2010+, and as time goes by, the trend appears different for each:

http://www.nymex.com/lsco_fut_csf.aspx (crude) - Steady 60+
http://www.nymex.com/ng_fut_csf.aspx (natural gas) - Volatile
http://www.nymex.com/gol_fut_csf.aspx (gold) - Rising
http://www.nymex.com/sil_fut_csf.aspx (silver) - Rising
http://www.nymex.com/cop_fut_csf.aspx (copper) - Falling
http://www.nymex.com/alu_fut_csf.aspx (aluminium) - Falling


----------



## nizar (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

a good read...   

http://www.kitco.com/ind/Hamilton/mar172006.html


----------



## crackaton (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				kevo said:
			
		

> CRB is 30% of its eventual highs. Gold will be 1000 +, Silver 20+. Copper $3.00 a pound, lead 2.00 a pound. I think lead, corn and sugar are the next big movers. Time to buy MMN, OXR and Bolinski Gold is monday. Correction is over.  I got a few items at http://blog.kontentkonsult.com and www.kontentkonsult.com you guys might like to read. I most bullish on SSM and PDN. The uranium bull has just begun.




 AAR AEX and EXT just begun have FUN!!!


----------



## nizar (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				kevo said:
			
		

> CRB is 30% of its eventual highs. Gold will be 1000 +, Silver 20+. Copper $3.00 a pound, lead 2.00 a pound. I think lead, corn and sugar are the next big movers. Time to buy MMN, OXR and Bolinski Gold is monday. Correction is over. I got a few items at http://blog.kontentkonsult.com and www.kontentkonsult.com you guys might like to read. I most bullish on SSM and PDN. The uranium bull has just begun.




sugar the NEXT big mover?? it HAS moved heaps already...
tend to agree with the rest... OXR is making big money, maybe $1million a day NETT...
any predictions on zinc?
maybe $1.50/lb


----------



## michael_selway (19 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				nizar said:
			
		

> sugar the NEXT big mover?? it HAS moved heaps already...
> tend to agree with the rest... OXR is making big money, maybe $1million a day NETT...
> any predictions on zinc?
> maybe $1.50/lb




yeah sugar maybe not as Crude looks to be steady for a long time to come

http://www.nymex.com/lsco_fut_csf.aspx (crude) - Steady 60+

Btw how did u get OXR 1 mil a day net?

thx

MS


----------



## nizar (20 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				michael_selway said:
			
		

> Btw how did u get OXR 1 mil a day net?




Sepon:
a) Gold: 200,307oz @ cost of us$201/oz
net revenue = 200,307*(550-201)*0.74 = au$51,731,285

b) Copper: 60,000tonnes @ cost of us$1.00/lb
net revenue = 60,000*2.2*1,000*(2.20-1.00)*0.74 = au$117,216,000

Golden Grove:
c) Zinc: 130,000tonnes @ cost of us$0.32/lb
net revenue = 130,000*2.2*1,000*(1.00-0.32)*0.74 = au$143,915,200

d) Copper: 10,000tonnes
net revenue = 1/6*b = au$19,536,000

e) Gold: 40,000tonnes
net revenue = 40,000*(500-201)*0.74 = au$10,330,400

Total = au$342,728,885

Tax @ 30% = au$102,818,665

NPAT = au$239,910,220

Per day = au$657,288

so i was way off, my bad, but still a good figure. PLus i didn't consider silver from GG which is 3million oz and lead at 8,000tonnes coz they didnt have costs in UK presentation. That's where i got all my figures from.

And i used Cu at 2.20, Zn at 1.00, and gold at 550, aud to usd ex rate of 0.74

also, by 2008
Prominent Hill to add 90-100,000 tonnes of Cu, 110-130,000 tonnes of Zn and 420,000 oz of gold

Sepon Cu output will double by 2009...

So good times ahead for the Ox..


----------



## michael_selway (20 March 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				nizar said:
			
		

> Sepon:
> a) Gold: 200,307oz @ cost of us$201/oz
> net revenue = 200,307*(550-201)*0.74 = au$51,731,285
> 
> ...




Wow thx, ill look into it, the presentation

Btw NPAT is that excluding fixed costs? capex? depreciation?

thx

MS


----------



## RichKid (3 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Not over yet if this chart is anything to go by, this time period is too short imo to get a clear picture of it all but I couldn't find data for the earlier years (ie going back 75yrs+), not sure if they can calculate it that far back...


----------



## dodgers (3 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Just been looking back at that Jim Rogers interview...

anyone know a good way to gain exposure to agricultural commodities...sugar, grain, coffee etc

cheers


----------



## RichKid (3 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				dodgers said:
			
		

> Just been looking back at that Jim Rogers interview...
> 
> anyone know a good way to gain exposure to agricultural commodities...sugar, grain, coffee etc
> 
> cheers




Hi dodgers,

You could try large co's which produce those or try shorting stocks adversely affected by rises in those prices. You would have to do some research to see if there is any correlation. The ASX has some cotton producers (Namoi, Qld cotton etc). Maybe CFD's for direct exposure?? 

There are also 'commodity warrants' (search ASF for the term) but again you need to know exactly how those instruments work or you will get burnt, they are risky instruments. Might be more references to the same question and Jim Rogers on ASF, try the search tool. I haven't been following the soft commodities so can't comment on how bullish they are compared to the metals.


----------



## dodgers (5 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Thanks Richkid

I'll do some research and let you know if I find anything interesting. Like most people here I've been investing in resources / miners for the last couple of years. Apart from sugar however I haven't heard much on any other agricultural commodity. I guess we're in the wrong country. A friend of mine is trading them in the states but there's no market here. Will see if I can find anything.


----------



## michael_selway (5 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*



			
				dodgers said:
			
		

> Just been looking back at that Jim Rogers interview...
> 
> anyone know a good way to gain exposure to agricultural commodities...sugar, grain, coffee etc
> 
> cheers




Sugar - CSR
Grain - AWB
Cotton - QCH

My favs

thx

MS


----------



## nizar (11 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Copper, Zinc Climb to Records in London Amid Supply Concern 

April 10 (Bloomberg) -- Copper rose to a record, leading a rally in metals as investors bet returns on commodities will beat those on stocks and bonds. Zinc climbed to the highest ever, and nickel jumped the highest since 1989. 

Copper rose after the government failed to intervene in a 17- day strike at Grupo Mexico SA's La Caridad mine, the nation's second-largest copper mine, while a leak at a Lonmin Plc platinum plant in South Africa disrupted production. Rising demand from hedge and mutual funds has helped drive copper 79 percent higher in the past 12 months. Zinc has more than doubled. 

``The demand story is very robust,'' said Alfred Wong, who helps manage $12 billion at UOB Asset Management in Singapore. , ``We are quite upbeat.'' 

Copper for delivery in three months rose $185, or 3.2 percent, to $5,910 a metric ton on the London Metal Exchange, after earlier reaching a record $5,965. Zinc jumped $100, or 3.6 percent, to $2,911 a ton after reaching a record $2,927. Nickel climbed 3.4 percent to $17,425 a ton after reaching $17,650, the highest since March 1989. 

On the Comex division of the New York Mercantile Exchange, copper for May delivery climbed 6.85 cents, or 2.6 percent, to $2.709 a pound ($5,973 a ton) after reaching $2.712. Prices reached a record $2.7275 after the close of floor trading. 

A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date. 

The work stoppage at Grupo Mexico's La Caridad copper mine continued over the weekend with no intervention from the Mexican government, spokesman Juan Rebolledo said yesterday. The strike over improved conditions and new contracts began March 24. 

Commodity Rally 

The Goldman Sachs Commodity Index, which includes copper, zinc and gold, has advanced 22 percent in the past year, more than double the gain in the Standard & Poor's 500 Index of stocks. Benchmark U.S. Treasuries have lost investors about 1.6 percent this year, according to Merrill Lynch & Co. indexes. 

Precious metals climbed with gold on the Comex closing above $600 for the first time in 25 years. Silver gained for the third- straight session, extending a rally to a 22-year high. 

Gold futures for June delivery rose $9.10, or 1.5 percent, to $601.80 an ounce, more than making up for the 1.2 percent drop on April 7. The metal is up 16 percent this year. 

Silver for May delivery rose 49 cents, or 0.9 percent, to $12.56 an ounce. Prices have surged 72 percent in the past 12 months. 

Pittsburgh, Pennsylvania-based Alcoa Inc., the world's largest aluminum producer, is expected to report today a jump in first- quarter profit because of higher prices. Aluminum, which reached a 17-year high of $2,678.10 a metric ton on the LME Feb. 7, today rose $34, or 1.3 percent, to $2,574 a ton. 

Economic Growth 

The booming economies of China and India are stoking demand for the raw materials needed for factories, cars and appliances. China's economy expanded 9.9 percent last year and is headed for similar growth this year. 

The International Monetary Fund said last week it may raise its forecast for global economic growth this year. The world economy may expand 4.9 percent, it said April 3. It forecast on Sept. 21 that growth would be 4.3 percent. 

``For the first time in 15 years, all major economies are growing together in both North America, China and Europe,'' said John Kemp, an analyst at Sempra Metals in London. 

*Kemp forecasts copper may rise to as high as $7,000 a ton this year. Gary Lampard, an analyst at Canaccord Capital Inc., Canada's largest independent brokerage, increased his forecasts for base- metal prices. The gains are being ``heavily influenced by speculative activity,'' he wrote in a report today. * 

Investment Funds 

*Fund investments in commodities are forecast by Barclays Capital to climb by more than a third to $140 billion this year.* Merrill Lynch said Feb. 8 money managers should invest directly in commodities, rather than energy and mining stocks, to take advantage of rising prices. 

*Copper inventories monitored by the LME has dropped for six consecutive trading days, shedding 8.3 percent to 111,800 tons. That's less than three days of global consumption. Zinc stockpiles have plunged 53 percent in the past year to 267,650 tons, equal to less than 10 days of global consumption.* 

Nickel gained amid disruption to the building of Inco Ltd.'s Goro project in New Caledonia. Goro, due to produce 60,000 tons a year by late 2007, is being hampered by protests of anti-mine activists. Investors also are stocking up before a labor contract expires at Inco's main operations in Canada in May, said Maqsood Ahmed, an analyst at Calyon Corporate and Investment Bank in London. 

A three-month strike at Inco's Ontario mine from June 2003 sent prices to more than a three-year high that year. 

Inventories of nickel fell for the seventh straight trading day, declining 10 percent in the period to 29,430 tons, LME data shows. That's less than eight days of global consumption. 

Platinum rose $29, or 2.7 percent, to $1,094.50 an ounce in London, after earlier reaching $1,095.50. 

http://www.bloomberg.com/apps/news?pid=10000081&sid=ar216_xef.kQ&refer=australia


----------



## dodgers (12 April 2006)

*Re: Commodities Super Cycle- Do you believe in it?*

Thanks MS

Started a new topic on commodity cycles...hoping it might get some interest going...china's gotta start ramping up their food intake habits, not just their construction/building habits soon.


----------



## michael_selway (17 April 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				crackaton said:
			
		

> So where do you see us going this time round?




Good Point

I think we are at a stage called "bubble territory". No real fundamentals, just follow commodity prices. So a crash is inevitable. However it needs to go high enough to trigger a calapse. That is, a "superspike" is a beginning of the end. However atm, bubble is not big enough.

IMO, i think market crash will occur in 2007 or 2008, latest after Beijing Olympics. 

All Ords Terminal Value would need to be 6000-7000 points by then. Crash say to about 4000 points i can see it. Then it will take at least 10 yrs if ever to reach that high point again. See graph below, it was not till 1997 that All Ords cleary passed the 1987 pre crash high. Look at Nasdaq 2000 Tech Wreck as well, hasnt reach its all time high yet...












http://www.depression2007.com

The person predicting depression in 2007 is not far off it appears now

What are your thoughts?

Thx

MS


----------



## nizar (18 April 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				michael_selway said:
			
		

> Good Point
> 
> I think we are at a stage called "bubble territory". No real fundamentals, just follow commodity prices. So a crash is inevitable. However it needs to go high enough to trigger a calapse. That is, a "superspike" is a beginning of the end. However atm, bubble is not big enough.




Look at the graph posted by Nick Radge in the "Is this as good as it gets" thread... history shows it can get alot better before coming down.



			
				michael_selway said:
			
		

> IMO, i think market crash will occur in 2007 or 2008, latest after Beijing Olympics.




Im keen to know why u have maintained this theory, about Beijing Olympics being the driver of metals demand. This is NOT THE CASE. From 1960-1980 was the period where Japan underwent industrialisation and commodity prices were in a 20-year bullmarket. THe current bullmarket is due to the people of INdia and CHina, totaling 2.3billion people, are pulling themselves out of poverty and begin to modernise their lifestyles. There are no Olympics in India, and alot of the demand is coming from here, and there was actually Tokyo 1964 Olympics and i guess not long after this the DOW started went down... but this is likely to be a coincidence and i think THERE IS NO CORRELATION...THis is why economists and analysts like MArc Faber and Doug Casey and many others think that we are just at the beginning of another bullmarket which would last 20 or so years, because of the scale ie. the sheer number of people, prices will be heading upwards... this bullmarket will be much more than Japan-fuelled one of the 1960s and 1970s...

The only thing that can cause a market crash and maybe a recession even, is is high oil prices spike up and maintain at high levels...

JUst my view... but beware, when commodites went sick from 1960-1980, this was at a time when equity markets suffered, ie DOW went sideways from 1966-1982, except for the Japanese market, which soared and from 1960-1990 it went up 17-fold while the DOW only doubled....

So commodity prices are going up for a while yet, and equity markets may crash but this will have nothing to do with Beijing Olympics, IMO...

http://www.blastinvest.com/article/04_28_2005.htm



> Think of China and India, for example.  China is the world’s leading exporter and is developing an enormous manufacturing base unequalled in world history.  The Chinese people are slowly growing more prosperous over time and are starting to demand more commodities, everything from oil to transport goods to food to lumber to increase their standard of living.  With over a billion Chinese striving for American standards of per-capita commodity consumption, this current Great Commodities Bull ought to dwarf any other in history!
> 
> And India has another billion people of its own, with the same hopes and dreams as the Chinese or American people to create better lives for themselves and increase the standard of living for their children.  The Indians are training the best engineers and scientists in the world today, and their stellar standards of education make American public schools look like illiterate day-care playgrounds.  As the Indians start to earn and consume like Americans, their demand for commodities will be insatiable as well.
> 
> ...




http://www.zealllc.com/2004/combull2.htm

Look at this interview with Jim Rogers: http://www.investmentu.com/IUEL/2005/20050725.html


----------



## YOUNG_TRADER (18 April 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				nizar said:
			
		

> Im keen to know why u have maintained this theory, about Beijing Olympics being the driver of metals demand. This is NOT THE CASE. From 1960-1980 was the period where Japan underwent industrialisation and commodity prices were in a 20-year bullmarket. THe current bullmarket is due to the people of INdia and CHina, totaling 2.3billion people, are pulling themselves out of poverty and begin to modernise their lifestyles. There are no Olympics in India,





Just to point out that India has the 2010 CommonWealth Games


----------



## nizar (18 April 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				YOUNG_TRADER said:
			
		

> Just to point out that India has the 2010 CommonWealth Games





OOoops sorry my bad, but does any1 really think this is the main driver of demand ?

I just questioned it coz i never read it anywhere thats all..   

Keen to hear thoughts..


----------



## michael_selway (18 April 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				nizar said:
			
		

> OOoops sorry my bad, but does any1 really think this is the main driver of demand ?
> 
> I just questioned it coz i never read it anywhere thats all..
> 
> Keen to hear thoughts..




*Hi Nizar, i just think the the Beijing Olympics, is the "Super Dirver" of demand for commodities right now in China. Btw Commonwealth Games is no where near as robust as what Olympics Games can bring to an economy, literally billions in GDP growth.

so after that, its not going to drop to 0 or anything, just a slow down in demand. However this small retreat will trigger a collapse. It makes sense. You can say a HUGE correction rather than a Bear Market, if you wish. Also supply response will come on board, as you have said KZL, copper production increases dramtically by then.

But thanks IMO only   * 

Thanks

MS


----------



## noirua (17 May 2006)

*Re: What Year Did You Start Investing/Trading In The Stockmarket?*



			
				michael_selway said:
			
		

> *Hi Nizar, i just think the the Beijing Olympics, is the "Super Dirver" of demand for commodities right now in China. Btw Commonwealth Games is no where near as robust as what Olympics Games can bring to an economy, literally billions in GDP growth.
> 
> so after that, its not going to drop to 0 or anything, just a slow down in demand. However this small retreat will trigger a collapse. It makes sense. You can say a HUGE correction rather than a Bear Market, if you wish. Also supply response will come on board, as you have said KZL, copper production increases dramtically by then.
> 
> ...




Hi M_S, Your comments make a lot of sense and the following link seems to take a similar view, on cost: http://www.asianresearch.org/articles/2346.html


----------



## metric (19 April 2008)

this thread is 3 years old. but more relevant than ever. i believe precious metals are about to move into a super cycle, but it seems others believe all commodities will, including food, and minerals. lack of confidence in the us dollar could see more investment into gold and silver. demand in china and a re merging US may see minerals prices skyrocket, and the world wide shortage of corn, rice, wheat and other grains will see these commodities prices fly also. most of this is already being mentioned in the news. so i think yes, a super cycle is about to kick in.




> I am genuinely moving into the "crazy" and very small camp that believes the genuine "super spike" in commodities could evolve later this year. That is completely contrary to the consensus view of imminent commodity price collapse. I can't think of one domestic investor who is positioned in the equity market for the "super spike" scenario, but I can name dozens who are positioned for the commodity price collapse scenario. Let's see what comes, but remember you never overtake anyone by staying in the same lane. It's probably also not wise to drive head on into a billion urbanising Chinese!
> Charlie Aitken
> Director
> Head of Institutional Dealing
> Southern Cross Equities


----------



## wayneL (22 May 2008)

Times economics columnist Anatole Kaletsky is not my favourite writer. Only 4 months ago he was one of the leading property market cheerleaders and chief protagonist for the perpetual and permanent boom.

He seems to have come to his senses lately, facing the reality of current conditions. He still puts in some clangers with self defeating logic and circular argument, but this time he's written a blinder in my opinion.

He still gives me the sh!ts, but check this article:

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article3980797.ece

Discuss



> They're wrong about oil, by George
> Rip up your textbooks, the doubling of oil prices has little to do with China's appetite
> Anatole Kaletsky
> 
> ...






> SNIP:
> 
> The present commodity and oil boom shows all the classic symptoms of a financial bubble, such as Japan in the 1980s, technology stocks in the 1990s and, most recently, housing and mortgages in the US. But surely, you will say, this commodity boom is different? Surely it is driven by profound and lasting changes in global supply and demand:






> SNIP:
> 
> To see that these “fundamentals” are all irrelevant, we have merely to ask which of them has changed in the past nine months. The answer is none. The oil markets didn't suddenly discover China's oil demand nine months ago so this cannot explain the doubling of prices since last August. In fact, China's “insatiable” demand growth has decelerated.






> SNIP:
> 
> The people who tell you that commodity prices today are driven by “economic fundamentals” are the same ones who said that house prices in Britain were rising because of land shortages. The amazing thing is that just months after losing hundreds of billions in the housing and mortgage bubbles, investors and governments around the world have reverted to the discredited fallacy that financial markets always reflect economic reality, instead of the boom-bust cycles and misconceptions that George Soros's book vividly describes.


----------



## cuttlefish (22 May 2008)

I'm not sure I agree.  In my opinion the bubble that is collapsing at the moment, and has the potential to collapse in a spectacular way, is the $USD bubble. The USD has been accepted as the reserve currency and held its status/value for decades in spite of massive growth in US debt levels.  Thus I see this as just the beginning of oil, gold and other commodity price rises.   The rises will be driven by both the direct re-rating of prices based on a lower USD, inflationary effects of new money in the system, and also the flight of capital out of USD to hard assets.


----------



## Schmuckie (22 May 2008)

Donald Coxe, a global porfolio strategist for BMO Financial Group is a rather "mature" individual who has seen it all.  He's comparing the current commodities boom to the 1950s.  Except that the 1950s are now happening in the developing world, where with growing prosperity there's demand for durable goods and a rising standard of living.  He compares it to the post-depression, post-war period in the developed world.  

Every month his group publishes _Basic Points_, a very lively, and often times contrarian, view of the world.  

Someone has picked up the February 2008 _Basic Points_ here:  http://laurenstephens.net/uploads/cd729b71b7.pdf

It's a long read, and his 2003 look at the commodities market is reprinted before his 2008 update, so it's long, but it's a fun read.


----------



## jonojpsg (22 May 2008)

Personally, having read a fair bit about peak oil and from the apparent inability of producing nations to increase production, I am not surprised at all at oil moving the way it has.

I remember one show, albeit fictional, I think it was 2013: Oil no more or something like that.  Anyway, there were a couple of commodoties traders who jumped on oil and bought 200000 barrels at $110 a barrel and watched gleefully as it soared over the next couple of days to $150 a barrel.  They got caught tho as the major governments, eg G7, jumped in and suspended trading in oil.

ANyway, it is well before 2013 and it looks like our $150 a barrel is well within reach.


----------



## greggles (5 May 2021)

Fifteen years later, are we back in the midst of a commodities super cycle?









						Are We Witnessing the Start of a New Commodities Supercycle?
					

A leading global business to business finance magazine, focused primarily on international finance and known for its extensive industry research and rankings.




					www.institutionalinvestor.com


----------



## Dark1975 (5 May 2021)

greggles said:


> Fifteen years later, are we back in the midst of a commodity super cycle?
> 
> 
> 
> ...



I wish we had a crystal ball 😕
Tho unless fiscal policy changes, and if interest rates remain on hold,
I'm running with commidites/ crypto and stock until it pops.
Trend is your friend 😉
Tho i guess this could all change in 3mths once they release the proper inflation figures 😉🤫 which apparently haven't moved 🤣
Sshhh apparently inflation is 2-3% p.a 🤣


----------



## greggles (6 May 2021)

Dark1975 said:


> I wish we had a crystal ball 😕
> Tho unless fiscal policy changes, and if interest rates remain on hold,
> I'm running with commidites/ crypto and stock until it pops.
> Trend is your friend 😉
> ...




There is talk in the US of rising inflation even though the Federal Reserve is trying to hose it down. Warren Buffet recently referred to it as hyperinflation, which means that he is taking it seriously.

My understanding is that in times of high inflation, investors turn to hard assets such as commodities and real estate as inflation increases the price of those assets (and the cost to produce them). Governments in the west have been printing a hell of a lot of money in the last 12 months. This must also have an effect on the buying power of those currencies. It seems inevitable that in this economic environment it is only natural that prices will increase.

Perhaps we are entering a phase where the key to investment success is identifying the commodities that will rise in price the most in the short to medium term due to high demand and lack of supply and then pinpointing those companies that are producing those commodities for the lowest possible price.


----------



## rederob (6 May 2021)

greggles said:


> Perhaps we are entering a phase where the key to investment success is identifying the commodities that will rise in price the most in the short to medium term due to high demand and lack of supply and then pinpointing those companies that are producing those commodities for the lowest possible price.



The commodity price does not need to rise that much, depending on the product and its margin, where volumes are strong and the cycle is long.
I have found that one of the biggest difficulties in the minerals area is getting consistent data for comparison as the number of variables is large.
Here's some info regarding what to look for with an iron ore producer.
That said, the crystal ball for determining which commodity will increase more, and/or for how long, gets shattered on a regular basis.
Right now anything to do with battery production and electrification probably has the better chance of lasting, so I have been advocating a case for copper in another thread.
Iron ore is in the stratosphere right now, and I hope it gets a soft landing when demand is back to normal (whatever that is!).
I am not sure we can really call where we are at "*a supercycle*" as apart from China the remaining global demand will be largely driven by post-covid stimulus and not an enduring period of global economic growth.  Once that splurge is over it's hard to see demand sustaining itself.


----------



## greggles (7 May 2021)

rederob said:


> The commodity price does not need to rise that much, depending on the product and its margin, where volumes are strong and the cycle is long.
> I have found that one of the biggest difficulties in the minerals area is getting consistent data for comparison as the number of variables is large.
> Here's some info regarding what to look for with an iron ore producer.




Agree with you about this.



rederob said:


> That said, the crystal ball for determining which commodity will increase more, and/or for how long, gets shattered on a regular basis.
> Right now anything to do with battery production and electrification probably has the better chance of lasting, so I have been advocating a case for copper in another thread.




I think this comes down to research and requires a lot of forward thinking and extrapolation. Which industries that require a certain commodity as part of production are in their infancy and look likely to experience explosive growth? It's hard to stay ahead of the pack and it requires a lot of investigation and reading. I'm starting this process now to try and predict booming markets and commodities but it's hard going. Still, nothing comes easy.



rederob said:


> Iron ore is in the stratosphere right now, and I hope it gets a soft landing when demand is back to normal (whatever that is!).
> I am not sure we can really call where we are at "*a supercycle*" as apart from China the remaining global demand will be largely driven by post-covid stimulus and not an enduring period of global economic growth.  Once that splurge is over it's hard to see demand sustaining itself.




People (the media mostly) are talking about Biden's upcoming infrastructure spending spree - if it is passed by Congress - and the impact that will have on commodity prices due to the demand created. Western economies are going to try and spend themselves out of the impact COVID-19 has had on their economies and that will create a huge demand for base metals and other commodities as well. I think we are still near the beginning of this growth phase and there is considerable growth still to come. Pinpointing where that growth will be greatest and sustain the longest is the tricky part.


----------



## rederob (7 May 2021)

greggles said:


> Agree with you about this.
> 
> I think this comes down to research and requires a lot of forward thinking and extrapolation. Which industries that require a certain commodity as part of production are in their infancy and look likely to experience explosive growth? It's hard to stay ahead of the pack and it requires a lot of investigation and reading. I'm starting this process now to try and predict booming markets and commodities but it's hard going. Still, nothing comes easy.
> 
> People are talking about Biden's upcoming infrastructure spending spree - if it is passed by Congress - and the impact that will have on commodity prices. Western economies are going to try and spend themselves out of the impact COVID-19 had had on their economies and that will create a huge demand for base metals and other commodities as well. I think we are near the beginning of this phase and there is considerable growth still to come. Pinpointing where that growth will be greatest and sustain the longest is the tricky part.



As you said, research, forward thinking and extrapolation are needed.  
Of the miners looking really interesting, Lynas Corp fits my bill. It's doubled its pre-pandemic price and its late-2020 recent capital raising has set it up to star in the expanding digital and green economies. If the US/China trade war hots up then I see Lynas being a major beneficiary.
LTC's chart  to me suggests some consolidation or even downwards price movement in the near term so maybe worth picking up on the next big general move down on the ASX.
Aside from that, there are so many "possibles" during a commodity boom that over the next year it might be hard to go wrong.


----------



## greggles (10 May 2021)

Found this on Twitter today, got a chuckle out of it and thought it was best suited to this thread. The author currently puts us at 10 o'clock on the commodity investment cycle, and I think that's probably pretty close to the mark. Maybe 9:30.


----------



## Gunnerguy (10 May 2021)

greggles said:


> Found this on Twitter today, got a chuckle out of it and thought it was best suited to this thread. The author currently puts us at 10 o'clock on the commodity investment cycle, and I think that's probably pretty close to the mark. Maybe 9:30.
> 
> View attachment 124036



Greg goes,
Thanks for this. Having worked in the oil industry for 30 years, and read all about ‘Peak Oil’ this particulate diagram reminds me of all the ups and downs of the oil industry. Over the last 20 years.
Great diagram!
Gunnerguy


----------



## Smurf1976 (10 May 2021)

Not only the effects of inflation on commodity demand but also on the production side need to be considered.

Quite a few have noted that if it wasn't for incredibly cheap money, the US shale industry quite likely wouldn't have gotten anywhere at all. It simply doesn't produce a return on capital that would stack up in a world of 10% yields on high quality debt and somewhat higher on low quality for example, it stacks up only because investors are willing to throw money at anything that's even slightly above zero.

Worth noting in that context that oil at $65 per barrel is high by historic standards, indeed adjusted for inflation it's almost exactly the same as the price which followed the 1973-74 oil embargo and which was widely termed a "crisis" at the time, even bringing a UN response in due course. It has been higher yes, but today's price most certainly isn't low if viewed in terms of the industry's overall historical context.

The broader financial situation is something to consider in all of this. Cheap credit fuels a lot of things, commodity production included, that otherwise wouldn't likely take place.


----------



## waterbottle (16 May 2021)

Here's one article arguing that these prices are likely not sustainable :





__





						Free Article Limit Reached - The Northern Miner
					

You’ve reached your limit of free weekly articles. Enjoy 4 weeks of unrestricted access: Register for a free trial Subscribe for as low as $2.19...




					www.northernminer.com


----------



## rederob (16 May 2021)

waterbottle said:


> Here's one article arguing that these prices are likely not sustainable :
> 
> 
> 
> ...



Good balance of perspectives.
Neither copper nor iron ore are in "extreme deficit" just yet and demand might just be a post-covid hangover as a semblance of western economy recovery is underway.
Aluminium, zinc, lead and nickel appear to be hangers on and their price increases will be best held against inflation.
I think for a supercycle to be sustainable we need India to do a China, concurrent with broader African development/industrialisation.  As the article suggests, that's a few years away at best.


----------



## greggles (14 February 2022)

> I’ve been doing this 30 years and I’ve never seen markets like this. This is a molecule crisis. We’re out of everything, I don’t care if it's oil, gas, coal, copper, aluminium, you name it we’re out of it.




Jeff Currie, Head of Commodities Research at Goldman Sachs Group.









						Goldman commodity veteran sees unprecedented pricing due to shortages
					

Jeff Currie says in 30 years’ trading he’s never witnessed anything like current conditions




					www.businesslive.co.za
				




Just saw the above quote in another thread. I brought this up nine months ago in this thread, but it looks like commodities prices are continuing to gather momentum. As far as hard assets go, real estate looks cooked. With commodities being undersupplied it looks like the next logical place for the big players to park cash. Copper, oil, gold, lithium, nickel, rare earths, all on bullish runs. No reason why it can't continue throughout 2022.


----------



## frugal.rock (14 February 2022)

greggles said:


> Copper, oil, gold, lithium, nickel, rare earths, all on bullish runs.



I have similar sentiment, however, timing entries are key.
Rotation is rife so the contrarian trade is looking good.
What's up this week could be down next, and vice versa.
Without the timing bit, one might get stuck holding a  sudden drawdown for a while. 😬

With oil heading up, everything battery related should have a good year as the scramble for battery metals continues.


----------



## Sean K (14 February 2022)

greggles said:


> Jeff Currie, Head of Commodities Research at Goldman Sachs Group.
> 
> 
> 
> ...




Boring old Tin has been on a blinder for a year or so.


----------



## Dona Ferentes (14 February 2022)

Handy site for commodity numbers









						Commodity Prices - Price Charts, Data, and News - IndexMundi
					





					www.indexmundi.com
				




Click on a commodity from the list on the left to view its full price history


----------



## qldfrog (14 February 2022)

funnily (?) enough, miners taking a beating today, asx up just because of the big 4 banks


----------



## divs4ever (14 February 2022)

actually i was blaming the gold miners for my slightly green tint  ( which was a shame  , i had some buy orders in  )


----------



## divs4ever (14 February 2022)

Code:
Stock code or name





*holding goldies*
Mon 14 Feb 2022 4:41 PM Sydney time

CodeBid ($)Offer ($)Last ($)Change ($)(%)Open ($)High ($)Low ($)Volume



ActionsAGG



​5.650​5.660​5.660​0.190​3.47​5.600​5.660​5.550​16,760​​​BUY | SELLAIS



​0.135​0.145​0.140​-0.010​-6.67​0.145​0.150​0.135​7,971,205​​​BUY | SELLEVN



​3.940​3.960​3.960​0.290​7.90​3.920​4.020​3.860​12,149,286​​​BUY | SELLGOR



​1.425​1.430​1.430​0.070​5.15​1.415​1.465​1.415​3,173,584​​​BUY | SELLKRM



​0.075​0.077​0.077​0.004​5.48​0.075​0.078​0.074​938,123​​​BUY | SELLMML



​0.730​0.750​0.730​0.035​5.04​0.705​0.735​0.700​2,063,679​​​BUY | SELLNST



​9.000​9.010​9.000​0.500​5.88​8.910​9.210​8.850​10,119,561​​​BUY | SELLOGC



​2.280​2.300​2.280​0.160​7.55​2.260​2.360​2.260​677,937​​​BUY | SELLOZL



​25.650​25.720​25.700​-0.180​-0.70​25.750​25.855​25.210​1,514,662​




​​BUY | SELLRMS



​1.485​1.490​1.485​0.105​7.61​1.445​1.510​1.445​5,754,129​​​BUY | SELLRRL



​1.980​1.990​1.990​0.150​8.15​1.925​2.040​1.920​7,660,593​​​BUY | SELLTRY



​0.000​0.000​0.037​0.000​​0.000​0.000​0.000​0​​​BUY | SELLWGX



​2.020​2.030​2.030​0.085​4.37​2.020​2.090​2.010​1,431,163​​​BUY | SELL


----------



## qldfrog (14 February 2022)

yes I know PM went very well:


but my system stocks: mostly small caps and miners lost 2% today overall
and even at the ASX200 level: materials were smashed today


but this is probably just noise and opportunities...


----------



## Dona Ferentes (22 February 2022)




----------



## Sean K (28 February 2022)

qldfrog said:


> yes I know PM went very well:
> View attachment 137550
> 
> but my system stocks: mostly small caps and miners lost 2% today overall
> ...




You're holding a lot of stocks there, Frogster.


----------



## qldfrog (28 February 2022)

Sean K said:


> You're holding a lot of stocks there, Frogster.



Not sure i get you ?these were discretionary asx stocks on mostly PM related area.
only a few and my systems are with different broker: 30 or so stocks now as heavily in cash overall
The coloured squares chart was an image of day changes on the whole asx200..not my portfolio 😊


----------



## Sean K (1 March 2022)

qldfrog said:


> The coloured squares chart was an image of day changes on the whole asx200..not my portfolio 😊




Looked an impressive holding list anyway.


----------



## Dona Ferentes (6 March 2022)




----------



## rederob (6 March 2022)

Dona Ferentes said:


> View attachment 138645



An interesting feature of the present price booms in so many commodities is their supply constraints rather than overwhelming demand. Covid has clearly had a massive impact on supply in most sectors, and now the Ukranian crisis will amplify that trend.
Oil has not yet rebounded as North American unconventional oil remains well below pre-pandemic levels, while coal supply is being hit by ethical considerations and lack of banking industry support for new projects.
New energy metals are the exception, and in the case of copper and nickel which take many years to ramp up supply, their price strength looks assured for many years to come.
At a global level we are not in a cycle of comparative strong industrial growth as few post-covid (are we there yet) stimulus measures have been enacted.
Apart from the above, China has driven iron ore prices to record highs in the past year, but outside of China few nations are doing much to add to significant commodity demand.


----------



## divs4ever (6 March 2022)

rederob said:


> An interesting feature of the present price booms in so many commodities is their supply constraints rather than overwhelming demand. Covid has clearly had a massive impact on supply in most sectors, and now the Ukranian crisis will amplify that trend.
> Oil has not yet rebounded as North American unconventional oil remains well below pre-pandemic levels, while coal supply is being hit by ethical considerations and lack of banking industry support for new projects.
> New energy metals are the exception, and in the case of copper and nickel which take many years to ramp up supply, their price strength looks assured for many years to come.
> At a global level we are not in a cycle of comparative strong industrial growth as few post-covid (are we there yet) stimulus measures have been enacted.
> Apart from the above, China has driven iron ore prices to record highs in the past year, but outside of China few nations are doing much to add to significant commodity demand.



 remember current ( official ) US policy is to further restrict  the development/use of unconventional oil   , so it is also creating it's share of the problem  (  not to mention funding unrest in other oil-producing nations )


----------



## divs4ever (6 March 2022)

so do we consider this to be a true  commodity super-cycle  or an artificial device  to suit a different agenda


----------



## rederob (6 March 2022)

divs4ever said:


> so do we consider this to be a true  commodity super-cycle  or an artificial device  to suit a different agenda



I would call it an accidental boom.
Ideally we want strong global-level industrial production to drive broad based commodity demand.
Covid exacerbates some data as 2020 production levels were suppressed, making 2021 data looking really good as it has come off a low base.  It also has had an effect on supply in that many sectors are yet to return to pre-pandemic levels, so prices have been driven higher while demand has struggled to return to 2019 levels.


----------



## Dona Ferentes (6 March 2022)

Freight Waves, the global supply chain magazine, ..... last week [ ] argued that "the second Cold War is here" and entire supply chains will be re-written as a consequence.



> "_We are witnessing the remaking of the world order in front of our eyes, and this will impact global supply chains in unforeseen ways_," Freight Waves chief executive Craig Fuller wrote.





> _"We are about to experience the most dramatic and unpredictable supply chain map we've experienced since World War II. "If the Russia-Ukraine conflict's international ramifications keep spreading, we face a real possibility of a bifurcating global economy, in which geopolitical alliances, energy and food flows, currency systems, and trade lanes could split."_




Mr Fuller predicted Western companies would start to shift sourcing away from the "East" and more toward Western and neutral states.


> "_North American economic integration will become a new priority,_" he said. "_Surface transportation across the Eurasian continent will become more complex, and possibly contested._





> _"Entire supply chains will be rewritten, with new sources and partners, all in the interest of corporate and national security. "The future market winners will be the corporations that make the investments in supply chain infrastructure and reliable, Western-friendly production locations.....:_




_ -but it won't happen overnight. Nor will restoration of trust between players. As @redrob said it is a bit of an accidental boom, if only because of realignment of supply lines, and only for some sectors. 









						Why global supply chains will be re-written by the 'second Cold War'
					

The Russia-Ukraine conflict could blow apart the global economic order, including its supply chains, writes Gareth Hutchens.




					www.abc.net.au
				



_


----------



## waterbottle (6 March 2022)

divs4ever said:


> so do we consider this to be a true  commodity super-cycle  or an artificial device  to suit a different agenda




Yes.

Supply of commodities has been reduced - Russia and Ukraine can no longer sell to the West.


----------



## divs4ever (6 March 2022)

rederob said:


> I would call it an accidental boom.
> Ideally we want strong global-level industrial production to drive broad based commodity demand.
> Covid exacerbates some data as 2020 production levels were suppressed, making 2021 data looking really good as it has come off a low base.  It also has had an effect on supply in that many sectors are yet to return to pre-pandemic levels, so prices have been driven higher while demand has struggled to return to 2019 levels.



 i was more thinking the value of currencies ( all of them ) declining   ( in real purchasing power )  putting pressure on costs  ( whether it is staff costs , reduced productivity per hour worked , compliance costs )

 i am watching as more and more miners  trying for a 'hub and spoke ' development model  , and would not be  shocked to see it become more popular in agriculture as well  , ( and easy credit fueling these plans )

 since this appears to be an unnatural extension of the mining cycle , what brings this back to earth  .. insane energy costs , more supply chain disruptions , a credit crunch , or just a lack of capable staff   ,or we start  feeling the bite of sanctions ( boycotts from China or elsewhere )


----------



## divs4ever (6 March 2022)

waterbottle said:


> Yes.
> 
> Supply of commodities has been reduced - Russia and Ukraine can no longer sell to the West.




 but more than just those  two , Brazil had the tailings dam failures , civil unrest in a few other places ( not just Africa )  i feel this started before the virus outbreak  , but the  virus issues added acceleration  , and now we have 'war rumblings '


----------



## waterbottle (6 March 2022)

divs4ever said:


> but more than just those  two , Brazil had the tailings dam failures , civil unrest in a few other places ( not just Africa )  i feel this started before the virus outbreak  , but the  virus issues added acceleration  , and now we have 'war rumblings '




Agreed.

Western suppliers offer stability during a period of unstable geopolitics and fragile supply chains.

Definitely a boom cycle IMO


----------



## divs4ever (6 March 2022)

having had the odd boil in my younger days  ,  i wonder  when it will go back to normal  and how much pain will that cause 

 ( the twisted logic behind  my buying into a decline and reducing cash invested  in the larger rallies )

 some will have noticed my penchant to 'free-carry '  so when a rally looks to be overdone   i can calmly decide IF and how much  profit i should crystallize 

 my long term aim  is to have stock-market exposure with minimal investment cash risk  ( apart from the ravages of inflation ) and still receive some div. income  along the way 

 and yes  i have often foregone extra capital gains ( and had extra brokerage costs ) 

 but what is relative novice to do  in a tumultuous  market and i NEED i future income


----------



## Dona Ferentes (11 March 2022)

I quite like the comment in Jarad Dillian's newsletter, _The 10th Man_


> One theme I have been harping on [about] ... is that commodities tend to make V tops, and stocks tend to make V bottoms. But when stocks top, they make big, rounded U tops, and when commodities bottom, they make big, rounded U bottoms (the oil bottom in 2020 is the exception, where prices went negative).
> 
> We’re seeing a lot of V tops in commodities, and correspondingly, we’re going to see a V bottom in stocks.




Ties in with my view, that _I'd rather be roughly right than exactly wrong_.


----------

