Commodities tipped to collapse

[BREND]

Grateful to learn about the stainless companies that have closed down: Most have barely been able to keep up with orders until recent weeks.

Are u in the stainless steel industry?

 

[rederob]

Are u in the stainless steel industry?

No, but I am interested to know which stainless producers have recently closed shop.

 

[noirua]

Should there be a collapse, it may well from far higher levels than today. Mining stocks are up overnight in Europe and the States, many reaching all-time highs.

 

[BREND]

No, but I am interested to know which stainless producers have recently closed shop.

I heard that many from China, not sure about other parts of the world.

 

[BREND]

Should there be a collapse, it may well from far higher levels than today. Mining stocks are up overnight in Europe and the States, many reaching all-time highs.

Some mining stocks have been up for weeks already, look at BHP Billiton, Southern Copper and CVRD.

 

[CanOz]

Should there be a collapse, it may well from far higher levels than today. Mining stocks are up overnight in Europe and the States, many reaching all-time highs.

US Markets open tonite. You mean they were up Friday nite?

 

[rederob]

I heard that many from China, not sure about other parts of the world.

Chinese stainless steel production up 68% year on year - not many would have closed shop!

 

[BREND]

Chinese stainless steel production up 68% year on year - not many would have closed shop!

I'm just telling you what I had heard from my nickel clients.
They said many of their stainless steel clients had closed down factories.

What's your view on base metal/ gold/ silver/ oil now? Or market in general?

 

[trendsta]

Many economists like to use supercycle, and treat the whole commodity group as one. I think that is a wrong way to look at commodities. Different commodities, ie base metals, have different supply and demand situations.

Aluminum inventory is in abundance, China is producing huge amount of aluminum every year, there will not be any shortage of aluminum in the near term.

Whereas lead and tin supply are so little, any supply disruption (which is happening to tin and lead now) will push their prices to a much higher level.

As for copper, it has become a gambling pawn for hedge funds, rather than an investment class. There is hardly any explanation for their price movement except for hedge funds' and banks' trading activities.

Nickel price has overshot its fundamental value, now the price level is only at the mercy of the hedge funds who are controlling the remaining inventory level at LME warehouses. There is little demand for nickel now, a lot of stainless steel companies had closed down, because cost of nickel is way too high. All the news of high demand for nickel is just bull****.

I think you missed my point there Brent.

The general complex IS driven by economic growth. What I was saying is that I dont think Chinese economy will slow enough to warrant a collapse in commodity prices. Thus demand for base metals as well as iron ore will remain high. If a collapse or correction is to occur it will happen after 08 due to above mentioned reasons.

Yes, agreed each metal has different supply and demand conditions. But remember at times those fundamentals dont matter. Look back to May 06 when the whole complex started collapsing. Zinc went down from 3900 to 3100 even though each day LME stocks for zinc were going down. The market PERCIEVES the whole metals complex as one market. So if a collapse were to occur, again, those fundamentals would go out the window...

 

[rederob]

I'm just telling you what I had heard from my nickel clients.
They said many of their stainless steel clients had closed down factories.

What's your view on base metal/ gold/ silver/ oil now? Or market in general?

Base metals: Firm to strong for remainder of year - with some doing better than others
Gold/silver: Bullish
Oil: neutral until second half

 

[BREND]

Base metals: Firm to strong for remainder of year - with some doing better than others
Gold/silver: Bullish
Oil: neutral until second half

Yeh! I like gold too, bought gold when it was trading at USD590. Now taking profit slowly.

 

[Freeballinginawetsuit]

I
Yes, agreed each metal has different supply and demand conditions. But remember at times those fundamentals dont matter. Look back to May 06 when the whole complex started collapsing. Zinc went down from 3900 to 3100 even though each day LME stocks for zinc were going down. The market PERCIEVES the whole metals complex as one market. So if a collapse were to occur, again, those fundamentals would go out the window...

Although a correction would seems probable ATM, recent weeks have seen a willing capacity for liquidity (on large volume) to enter the market on value stocks and reject not only the lows but provide higher support in the pullbacks.

The aforementioned is in stark contrast to the willingness of liquidity to enter the market after May 06 pullback. Although punters did provide support at this time, volume's were low and the smart money was on the sidelines until fundamentals drove the market out of months of sideways movement. A direction was found.....slowly. Many a punter would have sold out too soon back then, out of sheer frustration with the lack of market direction.

Already we are hearing rumblings from the experts and their changing flip/flopping on commodities.......drawn from the bleeding obvious liquidity that has enterd the market in recent weeks rejecting old lows and providing new support for fundamentally sound commodity companies.

IMO a lot can be learned from the current new highs of many a Nickler, bounce of the Zincors and how willing the market is to extend the caps of the 'U' stocks. IMO I dont think the market will go sideways like May 06, odds are in favor of modest gains till June or a seriously nasty pullback to take some of 06's profitts. I am punting on the former and volumes over recent weeks have on further confirmed this in my mind.

As with most punters, I am well aware of how far extended the market is at the moment.....but I thought that throughout 06 and look at the gains made. Realistically and I am sure many would agree, that anyone who has been in the market the last few years can afford the early punt this time around ....especially with only a few months before tax time.

 

[CanOz]

Although a correction would seems probable ATM, recent weeks have seen a willing capacity for liquidity (on large volume) to enter the market on value stocks and reject not only the lows but provide higher support in the pullbacks.

The aforementioned is in stark contrast to the willingness of liquidity to enter the market after May 06 pullback. Although punters did provide support at this time, volume's were low and the smart money was on the sidelines until fundamentals drove the market out of months of sideways movement. A direction was found.....slowly. Many a punter would have sold out too soon back then, out of sheer frustration with the lack of market direction.

Already we are hearing rumblings from the experts and their changing flip/flopping on commodities.......drawn from the bleeding obvious liquidity that has enterd the market in recent weeks rejecting old lows and providing new support for fundamentally sound commodity companies.

IMO a lot can be learned from the current new highs of many a Nickler, bounce of the Zincors and how willing the market is to extend the caps of the 'U' stocks. IMO I dont think the market will go sideways like May 06, odds are in favor of modest gains till June or a seriously nasty pullback to take some of 06's profitts. I am punting on the former and volumes over recent weeks have on further confirmed this in my mind.

As with most punters, I am well aware of how far extended the market is at the moment.....but I thought that throughout 06 and look at the gains made. Realistically and I am sure many would agree, that anyone who has been in the market the last few years can afford the early punt this time around ....especially with only a few months before tax time.

Tonite is the nite, i think the US markets will tell us how the mob reacts to the sell off in China.....lets see if the money is still keen to enter the market in Australia if the US takes a pounding tonite.

I agree there is so much money looking for a home, but value is getting scarce now. The ones finding a home for the all that super money have to be careful too.

Cheers,

 

[Freeballinginawetsuit]

Tonite is the nite, i think the US markets will tell us how the mob reacts to the sell off in China.....lets see if the money is still keen to enter the market in Australia if the US takes a pounding tonite.

I agree there is so much money looking for a home, but value is getting scarce now. The ones finding a home for the all that super money have to be careful too.

Cheers,

I'd say a lot of money has been in and out in recent weeks, certainly a lot of the insto's are only recent ins .

Incidently wasn't it only a few days back when most of the Chinese stocks got locked out for posting 10 percent gains in a day. How far the market pullsback is the ?>their is plenty of room/abundance of punters who could bail long term holdings and still maintain substantial gains.

The question will be the 'greed factor' of the liquidity on the sidelines.....and the ever present doomsdayers who are well over due for a correct call

 

[Dr Doom]

Tonite is the nite, i think the US markets will tell us how the mob reacts to the sell off in China.....lets see if the money is still keen to enter the market in Australia if the US takes a pounding tonite.

I agree there is so much money looking for a home, but value is getting scarce now. The ones finding a home for the all that super money have to be careful too.

Cheers,

I agree C. Some interesting data out in the US tonight - the alignment of the planets so to speak - syncronised corrections?. Are you actually located in China?.

~~~~~~~~~~~~~~~~~~~~~~~
Chinese shares listed in Shanghai tumbled nearly 5% after ending at a record Monday, with energy, steel makers and financial issues leading declines, and Hong Kong's Hang Seng Index ended its morning session lower.
Chinese traders said profit-taking was sparked by concerns additional macro-tightening policies could be introduced following the annual session of the China's National People's Congress that gets underway March 5.

~~~~~~~~~~~~~~~~~~~~~~~
London down tonight substantially already

Freeby, the Chinese market is also 'protected' by 10% in a sell-off also isn't it, somewhat limiting a full blown crash? I'm sure a similar scheme would arbitrarily kick in in the US markets also?

 

[CanOz]

I agree C. Some interesting data out in the US tonight - the alignment of the planets so to speak - syncronised corrections?. Are you actually located in China?.

~~~~~~~~~~~~~~~~~~~~~~~
Chinese shares listed in Shanghai tumbled nearly 5% after ending at a record Monday, with energy, steel makers and financial issues leading declines, and Hong Kong's Hang Seng Index ended its morning session lower.
Chinese traders said profit-taking was sparked by concerns additional macro-tightening policies could be introduced following the annual session of the China's National People's Congress that gets underway March 5.

~~~~~~~~~~~~~~~~~~~~~~~
London down tonight substantially already

Freeby, the Chinese market is also 'protected' by 10% in a sell-off also isn't it, somewhat limiting a full blown crash? I'm sure a similar scheme would arbitrarily kick in in the US markets also?

Yes, located in China. Wish i still had Bloomberg! Imagine the carnage tonite!

 

[Freeballinginawetsuit]

Freeby, the Chinese market is also 'protected' by 10% in a sell-off also isn't it, somewhat limiting a full blown crash?.

Any potential market reaction in the post was specific to OZ, perhaps I should have put the 'Chinese 10% +-' on a separate line, wasn't really relevant in any context just the reversal fact.

Although not sure...I don't think Ours or the US markets have any margin rules in place, certainly not on individual stocks and as for indices....I have never seen a '10 percent down day' on an entire indice, since Ive been investing.

 

[BSD]

Chinese market falls 10% - who cares?

Will have no effect on real metals demand

I seriously hope BHP etc get sold off heavily so I can top up on the way back to $32

 

[purple]

Chinese market falls 10% - who cares?

Will have no effect on real metals demand

The Australian mining industry is heavily tied to the chinese market. In fact the Chinese boom was one of the factors that galvanized the Aussie mining rush - the Aus gov even lowered taxes in 06 because they made so much money from trade with China.

Chinese market falls 10% - Aussies care! (unless you make a living blowing didgeridoos in the outback, where I was a couple of years back, no one had the faintest idea about China there)

 

[BSD]

The day-to-day performance of the Chinese A-Class stockmarket has limited relevance to the vibrance of the Chinese economy.

BHP will be fine

Demand for commods will be fine

Chinese GDP and Industrial Production will be fine.

Neither will be effected by this bubble being pricked

Opportunity presents