nizar said:Basically aluminium supplies up, copper down...
No zinc ?
professor_frink said:just been reading a couple of articles on the commodities bull over the weekend-
They're trying to flog off their newsletter, but they are still fairly interesting articles, especially the second one, which goes into the technicals of the big base metals
http://www.zealllc.com/2006/21bull.htm
http://www.zealllc.com/2006/basetech.htm
michael_selway said:
Given that there is only about 150,000 tonnes available (the other 125,000 tonnes is "cancelled") then zinc consumers will be in dire straits if Credit Suisse are right.nizar said:Zinc inventory has dropped 30 percent this year to 276,325 tons. Credit Suisse forecasts demand for the metal, which is used to galvanize steel, will exceed production this year by 466,000 tons.
http://quote.bloomberg.com/apps/news...4qg&refer=home
rederob said:Given that there is only about 150,000 tonnes available (the other 125,000 tonnes is "cancelled") then zinc consumers will be in dire straits if Credit Suisse are right.
A not so so obvious trend has been a recent decline in LME drawdowns from locations excluding New Orleans, suggesting consumers have tapered off buying activities as prices climb higher.
This is a common feature of tight markets and tends to bring on a price retrace, allowing dip-buying for the canny consumers who know full well prices will keep rallying into the foreseeable future.
I think it possible for zinc to reach $4000 per tonne by year's end - another 35% from here, but the price inelasticty of zinc will allow such an increase without great impact on final product prices.
Zinc is my favorite base metal because it will be in supply deficit for the next three years, has few substitutes and in most applications, higher prices do not diminish demand. For example a car uses about $17 worth of zinc. If zinc tripled in price, it would mean only a 2/10th of 1% percentage increase to a $20,000 car. However, the impact on a zinc mine of a few pennies per pound is substantial.
nizar said:Great post rederob.... ur last point (in bold) sounds familiar, and has been made by other commentators.... (see below)
Thats the beauty of zinc
Zinc is my favorite base metal because it will be in supply deficit for the next three years, has few substitutes and in most applications, higher prices do not diminish demand. For example a car uses about $17 worth of zinc. If zinc tripled in price, it would mean only a 2/10th of 1% percentage increase to a $20,000 car. However, the impact on a zinc mine of a few pennies per pound is substantial.
http://www.kitco.com/ind/Gerbino/mar172006.html
MSmichael_selway said:Btw Rederob, what do u mean by "cancelled" below?
dutchie said:Does anyone know the code(s) for the price of oil charts...
I would also like to know what the codes are to show a chart on Yahoo Finance for the prices of:
Gold; Zinc; Copper; Uranium; Coal and Aluminium.
rederob said:MS
Metals delivered to LME warehouses is usually held "on warrant".
When metal is purchased, the warrant is cancelled and the metal becomes available for delivery.
By following the ratio of cancelled to all metal held is a useful indicator of the trend - or metal's fundamentals.
Here's the latest LME data from last night:
rederob said:MS said, "Amazing so basically from the pic, 116300 are already "sold" waiting to be "shipped" out?"
Yes, it's just a matter of time, but typical daily outflows have averaged over 3000tonnes in recent weeks.
MS asked, "Also may I ask where u got the info above from (link)? Can you also post one for Copper?"
Yes, but copper is boring, so I added nickel.
If the nickel trend keeps up then steel prices will also rally much higher.
And yes to the source; it's from one of the many subscription services that are available.
Unfortunately the LME once made timely and detailed data available for free.
Nowadays there is a cost to staying a step ahead: You will see the above data reflected in Kitco Metals on Monday.
michael_selway said:Credit Suisse rates the stock (ZFX) as Upgrade to Outperform
Following a quarterly mark to market of earnings, the analysts point out that PE’s in the global metals and mining sector have been pushed to near single digits. As a result, they have lifted their recommendation on the stock to Outperform and their target by $5.95 to $11.62. <== Nearly Double, crazy stuff!
Target price is $11.62
Current Price is $9.84
rederob said:MS
I said copper was boring because the only action for it is in Asia, via China's SRB movements to Korean or Singaporean warehouses - likely in anticipation of delivery to parties that it tried to outwit last year when they went a wee bit too short and got caught.
There is no copper to speak of it Europe, a bit in USA and the rest pretty much spoken for in Asian warehouses: That's why the copper price keeps winding higher, and why the savvy funds are not frightened to pour more money into this particular commodity.
I think it's safe to say that copper will now easily reach $6000/tonne this year, and could add another 10% more before year's end.
While plant upgrades are in the pipeline, not a lot of new capacity will be brought on line in 2006.
Although 2007 will see the fruits of expansion plans put in train a few years ago, the question is whether increased output will take the market from deficit to balance, then oversupply.
Below is an Aluminium chart from LME (I don't have one for tin):
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