Australian (ASX) Stock Market Forum

Commodities Super Cycle - Do you believe in it?

Jump to new
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)?
Click to expand...
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.
 
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.''
 
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!!
 
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!!
Click to expand...

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

thx

MS
 
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.
 
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
Click to expand...

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 :D

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.
 
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
Click to expand...

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.
 
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?
 
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.
Click to expand...

crack do u know any silver specialists?

ZFX has silver but zinc is its major business

thx nizar btw for the info

MS
 
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

thx nizar btw for the info

MS
Click to expand...

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

michael_selway said:
do u know any silver specialists?
Click to expand...

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
 
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.
 
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.
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.
Click to expand...


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

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
 
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
Click to expand...
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
 
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.
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
Click to expand...

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
 
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.
Click to expand...

AAR AEX and EXT just begun have FUN!!!
 
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.
Click to expand...

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 :D
 
Top