Commodities tipped to collapse

[Knobby22]

I agree with you rederob.

Ducat, if the yuan wet up then imports would become cheaper to China, end result, no real effect.

 

[rederob]

BHP billiton says copper markets remain very positive
Last Update: 3:29 AM ET May 4, 2006

MELBOURNE (MarketWatch) -- Global miner BHP Billiton Ltd. (BHP) said Thursday that its view of both refined copper and copper concentrate markets remains "very positive" as disruptions to production look set to continue and stockpiles remain low.
"From such low levels it will take some time to rebuild stock to normal levels," BHP said in a statement.
"Large net inflows of fund money have also added to price rises but it is difficult to know when this will end."
The deficit in copper concentrate looks set to persist with China taking over from Japan as the largest market, BHP said. Treatment and refining charges are expected to fall.

 

[Bobby]

Hi Red,

What are your own thoughts ?

Bob.

 

[rederob]

Hi Red,

What are your own thoughts ?

Bob.

Bob
At post #15 on this thread.
Cheers

 

[michael_selway]

BHP billiton says copper markets remain very positive
Last Update: 3:29 AM ET May 4, 2006

MELBOURNE (MarketWatch) -- Global miner BHP Billiton Ltd. (BHP) said Thursday that its view of both refined copper and copper concentrate markets remains "very positive" as disruptions to production look set to continue and stockpiles remain low.
"From such low levels it will take some time to rebuild stock to normal levels," BHP said in a statement.
"Large net inflows of fund money have also added to price rises but it is difficult to know when this will end."
The deficit in copper concentrate looks set to persist with China taking over from Japan as the largest market, BHP said. Treatment and refining charges are expected to fall.

Yeah its funny how diff views in regards to copper the analysts have below

BHP Billiton says copper surplus unlikely, even by 2008

E-mail | Print | | Disable live quotes Last Update: 7:12 AM ET May 4, 2006

MELBOURNE (MarketWatch) -- Global miner BHP Billiton Ltd. (BHP) said Thursday that copper from mines is unlikely to catch up with surging demand by the start of 2008, a longer period than most analysts are predicting.
"The major independent analysts forecast that the market will move back into surplus later in 2006 or in 2007," said John Crofts, BHP's base metals marketing director.
At the end of 2004, analysts had been predicting a surplus at the end of 2005, which hasn't yet happened, Crofts said from London on a conference call.
"Even a surplus in 2007 looks more doubtful as disruptions to production can still continue to restrict," he said. "This is consistent with BHP Billiton's assessment of the market."

http://c.moreover.com/click/here.pl?x522474923&f=1774

Copper price 'set to plunge by 20pc'
By Tom Stevenson (Filed: 04/05/2006)

The soaring price of copper could drop by a fifth in the next two to three months, a senior trader on the floor of the London Metal Exchange has warned. The dealer, who asked to remain anonymous, said recent market fluctuations were typical of the trading pattern prior to a significant change of direction.

"I expect a 20pc correction. The market will be volatile and illiquid for a while before it cracks," he said. The LME accounts for around 90pc of the world's trade in copper, dwarfing rival markets in New York and Shanghai.

The London Metal Exchange

The price of copper has risen by 60pc this year, with the cash price for immediate delivery reaching a peak of $7,391 a tonne this week, a five-fold increase on the $1,400 at which the metal traded only four years ago. At yesterday's lunchtime fix of $7,231, copper has generated huge profits for the speculative funds who have piled into commodities but caused pain for industrial users.

The scepticism on the LME's trading floor is confirmed by the prices being quoted by brokers for delivery on the longest contracts, which are much lower than the current cash price. "Copper is the only commodity in the world, where you can buy for five-year delivery at a 45pc discount," the trader said. "The market is saying the current price is unsustainable or that supply will kick in to meet demand."

An escalation in the volume of speculative trading, and the growing use of commodities as a diversification for pension funds away from equities and bonds, has contributed to the soaring price of the metals traded on the LME. It is estimated that 80pc of trades derive from financial rather than industrial traders.

Big investors such as Hermes, which manages the retirement funds of BT and the Post Office, Calpers, the largest public sector fund in the US, and Sainsbury's pension fund have all announced plans to increase their exposure to commodities.

The International Wrought Copper Council, which represents copper fabricators, wrote to the LME and the Financial Services Authority saying: "This investment or speculative activity has come to dominate the market, tending to divorce it from its industrial base.'

For recent entrants to the market, a downward lurch like that expected by traders would be a stomach-churning reminder that the rise and rise of commodity prices in recent years is not one-way traffic.

Investors are divided between those who believe metal prices are in the early stages of a multi-year upward "super-cycle", driven by demand from the developing economies of China and India, and those who think recent rises are the last gasp of an unsustainable bubble.

Merrill Lynch recently compared the price performance of commodities with listed futures, including copper, with those such as rubber and steel that cannot be traded so easily using derivatives. On the basis of this analysis it concluded the influence of speculators on the market was "unprecedented" and analyst Richard Bernstein warned that "commodity prices always fell in the 12-month period subsequent to extreme commodity speculation".

Trading has soared over the past 18 months at the famously raucous LME, where a twice-daily round of five-minute "rings" sets the prices of six metals - zinc, tin, lead, copper, aluminium and nickel. During a short but intense dealing session, traders from eleven member firms face each other off from positions on a circular red leather-upholstered banquette.

http://www.telegraph.co.uk/money/ma...d=242&sSheet=/money/2006/05/04/ixcitytop.html

 

[Bobby]

Bob
At post #15 on this thread.
Cheers

Thanks Red,

Got it.

Hope your being a good boy like me tonight, although I'm entertaining myself as usual alls well.

Regards Bob.

 

[wayneL]

Yeah its funny how diff views in regards to copper the analysts have below



http://c.moreover.com/click/here.pl?x522474923&f=1774



http://www.telegraph.co.uk/money/ma...d=242&sSheet=/money/2006/05/04/ixcitytop.html

Nice pop upwards this evening.

Vivo El Toro Grande

 

[clowboy]

Well i hope the gains taking place ATM continue over night.

Could be a very interesting day on the market tommorow.

Chances are that it will all fall apart over night though.


SIGH


Seems like i need to take some lessons in Yo Yo ing.

 

[rederob]

Copper Surges to Record on Supply Concerns; Zinc and Aluminum Prices Soar
May 4 (Bloomberg) -- Copper prices surged the most in 18 years, reaching a record, after BHP Billiton Ltd. said labor disputes and equipment and worker shortages may persist at mines through 2008. Zinc also soared and aluminum climbed to the highest since August 1988.

``Almost every mine is working at full capacity and is under a lot of stress,'' Diego Hernandez, president of BHP's base-metals unit, said today in an a London interview. Melbourne-based BHP is the world's largest mining company.

Copper has risen 74 percent this year as disruptions at mines from Indonesia to Mexico limited supply and demand grew. Mining companies Antofagasta Plc and Kazakhmys Plc yesterday reported first-quarter production declines. The price rally has sent shares of producer Phelps Dodge Corp. to a record high today and boosted costs for makers of copper wire and pipes.

 

[RichKid]

Some weakness across the board in the metals today, nothing major yet but this volatility might get nastier. Even strong bulls expect corrections and some people are bound to get caught out (including me).

 

[jft]

Have a look at Alan Kohler's interview with Marc Faber on Inside Business yesterday ... its an interesting viewpoint.
http://www.abc.net.au/insidebusiness/content/2006/s1632456.htm
Cheers,
John

 

[Bobby]

Have a look at Alan Kohler's interview with Marc Faber on Inside Business yesterday ... its an interesting viewpoint.
http://www.abc.net.au/insidebusiness/content/2006/s1632456.htm
Cheers,
John

Thanks !

Bob.

 

[RichKid]

Have a look at Alan Kohler's interview with Marc Faber on Inside Business yesterday ... its an interesting viewpoint.
http://www.abc.net.au/insidebusiness/content/2006/s1632456.htm
Cheers,
John

Thanks for that John, he's quite a character.

 

[noirua]

Resources boom and a warning:


http://longterm.blogspot.com/

 

[tech/a]

Nice link But appears you may not have read it.

What he doesn't understand ( and if he did understand he wouldn't be a politician he'd be a rich investor) is that there is almost no similarity between resources and tech in terms of valuation. In the end a bubble is all about valuation and major metal companies and oil companies trading well below the market multiple IS NOT A BUBBLE. A company with no plan to ever be profitable raising $300M is a bubble. A company earning a few million dollars, selling for billions is a bubble. Companies trading at 50 or a 100 times earnings is a bubble. A company trading at 10 times earnings is NOT. Was the treasurer forecasting the end of the tech boom in 2000???

And finally the best warning of all from the same article.

DON'T TAKE YOUR ECONOMIC ADVICE FROM THE GOVERNMENT!!

 

[bvbfan]

If Costello think commodities are going to collapse then why is he making 36billion in tax cuts.

Either he is an idiot or doesn't believe what he's saying

 

[Smurf1976]

If Costello think commodities are going to collapse then why is he making 36billion in tax cuts.

Either he is an idiot or doesn't believe what he's saying

Or we're about to see some serious money printing.

 

[rederob]

DON'T TAKE YOUR ECONOMIC ADVICE FROM THE GOVERNMENT!!

This is what our taxes pay for:
http://www.abareconomics.com/australiancommodities/index.html
ABARE cannot conceive of gold averaging more than $560 this year, yet the report has data to end February 2006!
Then again, ABARE reckons that copper will average less than $5000/tonne this year, which means they will be right if copper now collapses to a shade over $4000 and stays there for the rest of the year.
I think if the people that wrote about the markets invested in them, they might do a bit better.
Anybody who wants to jump off the commodity juggernaut is welcome, but I reckon it has so far to go before a major correction (I am looking at about 20%) that it's just not worth it right now.
I think it is worth revisiting this issue in a few months, when oil prices will be over $80, and we can see what damage the across the board high prices are doing to consumers.

 

[coyotte]

Just set your " stop losses "
Ride it to the top and just over
and you can ALLWAYS re-enter


KISS
Coyotte

 

[professor_frink]

Or we're about to see some serious money printing.

does anyone here know at what rate we are printing money? Most people are aware of the U.S expanding their money supply at an exponential rate, but what are we doing here?