Zinc the metal for 2006

[Kauri]

Hi Chops,
If you use this site. http://www.metalprices.com/FreeSite/metals/zn/zn.asp
you will get the daily LME prices for cash and forward contracts ( in the far right hand side column you can select different metals). Handy for working out backwardation/contango if you're into that. Also gives meaningfull vol . Is updated once daily (in the early hours am our time ) after cob on LME and is what is quoted in most media as the bulk of serious industrial metal trading worlwide occurs on the LME. It differs to the comex and kitco due to cob times. Is easy to set up your own chart in Excell and do analysis, having the vol is invaluable for mine. The Kitco info is good for a general view of the market, but I have never heard it quoted officially or heard of anyone trading off it.
Cheers...
Kauri

 

[rederob]

Kauri
As a very quick aside:
Notice that nickel traded volumes have remained firm despite the high price.
Looks like any downside to nickel could be quickly bought into for a nice return.
Any takers for $50k/tonne before the year is done?

 

[Kauri]

Kauri
As a very quick aside:
Notice that nickel traded volumes have remained firm despite the high price.
Looks like any downside to nickel could be quickly bought into for a nice return.
Any takers for $50k/tonne before the year is done?

Yes, nickel is interesting...if the backwardation gets out to 4.5k-5k I think we could see inventories spike briefly... its at about 3.3k at the moment.

 

[BREND]

Nickel price is driven by falling inventory level. Nickel inventory level is manipulated by hedge fund. And funds have shorted nickel last Friday.
What does that imply? Leave it to your own judgement.

 

[wavepicker]

Some excellent high quality posting Wave and Redrob,

Will be interesting to see who's analysis was correct, I agree and am of the same view as Red, however am interested in Waves 5 wave chartist analysis,

Time will tell gents

Looks like time is starting to show the chartists right again Young Trader. Zinc and ZFX getting thumped, this is obviously some degree of 3rd wave happening.
This is shaping up exactly as expected in posts #543, 545, and 547. This was always a high probability for a fall.

How many techies apart from myself barney were bearish Zinc/ZFX early Jan???

Hardly any. Not even most other EW prationers on this site. This is why on occasion not even EW analysis is enough, and wavecounts need to be quantified and alternates narrowed down.


As for the fundementalists they were and still are perma bulls. Looks like they are gonna have to wait a while.
Rederob, you stated that Zinc would go to 5500 per ton soon back in late Dec. It was obvious back that this was a low probability scenario and that zinc would see 3000/3500 per ton before 5500.

Cheers
How many

 

[rederob]

Rederob, you stated that Zinc would go to 5500 per ton soon back in late Dec. It was obvious back that this was a low probability scenario and that zinc would see 3000/3500 per ton before 5500.

Cheers
How many

I only buy the dips, wavepicker.
If I was buying more zinc then I would have done so today.
Tight markets don't loosen as easily as some think - especially those that have "forecast" a bear market for commodities for 3 years (or more) in a row now.
Just as few forecast nickel would climb to $20k after it fell apart when $17k was first hit, few would forecast zinc can claim $6k this year. I'm not saying it will, as I don't know that it can double in price given the market's easing.
But to walk away from a bargain is not what good market players do, is it?
I will always play the man if the man is stupid enough to ask for it, but somehow I think you would rather play the ball.

 

[drmb]

Zn stabilising on LME or so it seems, at least does not seem to be in free fall again tonight.

"Metals melt after Red Kite losses - India Infoline News Service / Mumbai Feb 05, 2007 11:27 The UK-based metal-trading hedge funds US$1bn fund lost 20% in the 12-month ended January 24, the Wall Street Journal reported last week, sending prices on LME into a tailspin

Zinc, copper and other metal prices have been going downhill in the past few days following news that Red Kite Management Ltd., UK's metal-trading hedge fund, has made heavy losses in a one-billion fund.
Red Kite's US$1bn fund lost 20% in the 12-month ended January 24, the Wall Street Journal reported last week, sending metal prices on the London Metal Exchange (LME) into a tailspin.
Red Kite's performance in January was the worst for any month in at least a year, the Wall Street Journal said. One of Red Kite's funds last year gained more than 190% betting on metals, the newspaper reported.
On Feb. 2, zinc for delivery in three months fell by 9.1%, to US$3,080 per on the LME, the biggest drop since July 1997. Copper for delivery in the three months slumped 4.6%, to US$5,345 a ton, after earlier reaching US$5,250, the lowest since March 27. Aluminum, lead and tin also fell in sympathy.
Industry analysts say that signs of losses by hedge funds that had poured money into metals during last year's rally may prompt some speculators to cut their holdings, accelerating the decline in prices. But, others say that problems at one hedge fund cannot be taken as signal that metals are a bad investment.
Meanwhile, Red Kite plans to extend the notice period for redemptions. The investors will now be required to send redemption notices to the fund by February 15 in order to get their money back at the end of the first quarter.
"Given the current size of the fund we believe that to maintain efficient operation it is necessary to increase the withdrawal notice period," Red Kite said in a statement.

 

[chops_a_must]

The investors will now be required to send redemption notices to the fund by February 15 in order to get their money back at the end of the first quarter.
"Given the current size of the fund we believe that to maintain efficient operation it is necessary to increase the withdrawal notice period," Red Kite said in a statement.

This is a clear signal for me to not get back ino resources until after this date. I'll be waiting to see how things pan out in the second half of the month.

 

[CanOz]

This is a clear signal for me to not get back ino resources until after this date. I'll be waiting to see how things pan out in the second half of the month.

You could be missing out on a huge buying opp. As i stated in the KZL thread, what we've seen today looks like a huge capitulation of sellers. The majority of stock in Zincers especially, should be in longer term holders now, so the supply is low, the price must rise.

We will see.

Cheers,

 

[nizar]

You could be missing out on a huge buying opp. As i stated in the KZL thread, what we've seen today looks like a huge capitulation of sellers. The majority of stock in Zincers especially, should be in longer term holders now, so the supply is low, the price must rise.

We will see.

Cheers,

Well thats always the risk.
But at the time you never know whether its the beginning of a bear market or one mother of a buying opportunity.

As usual, those crazy punters that take the most risk make the most at the end, like those that bought ZFX for $8 in May (the absolute bottom) or KZL for $2.87 intraday in the same month.

I personally prefer to buy when the trend is back up again.

 

[chops_a_must]

You could be missing out on a huge buying opp.

This is entirely true. However, I prefer to look at lower risk opportunities, and at the moment, leading up until that time, resources could bounce back well, or they could crumble. I'd rather wait for a little while.

 

[CanOz]

Well thats always the risk.
But at the time you never know whether its the beginning of a bear market or one mother of a buying opportunity.

As usual, those crazy punters that take the most risk make the most at the end, like those that bought ZFX for $8 in May (the absolute bottom) or KZL for $2.87 intraday in the same month.

I personally prefer to buy when the trend is back up again.

Point taken, "look for confirmation that the trend has changed"

Cheers,

 

[drmb]

Point taken, "look for confirmation that the trend has changed" Cheers,

Well they wouldn't lie on TV would they? On Bloomberg? Would they?? And Adam from MacBank, we can trust him, can't we? (Adam who?) "Zinc Gains in London on Speculation Declines Were Exaggerated By Brett Foley Feb. 5 (Bloomberg) -- Zinc gained in London, rebounding from the largest weekly drop in at least 17 years, on speculation price declines were exaggerated and demand and supply will continue to be closely matched.

The metal used to galvanize steel more than doubled to a record last year amid rising demand from China. Prices on the London Metal Exchange slumped 15 percent last week as analysts including those at Barclays Capital cut 2007 price forecasts. ``We believe the zinc market will remain relatively tight in the first half and we expect a bounce in pricing, although not to levels we saw last year,'' said Adam Rowley, a London- based analyst with Macquarie Bank.

 

[BREND]

You could be missing out on a huge buying opp. As i stated in the KZL thread, what we've seen today looks like a huge capitulation of sellers. The majority of stock in Zincers especially, should be in longer term holders now, so the supply is low, the price must rise.

We will see.

Cheers,

I rather buy resources stocks now (that have already fallen so much), than to buy overvalued stocks listed in HK, China or Singapore (that have already risen so much).

 

[BREND]

Well they wouldn't lie on TV would they? On Bloomberg? Would they?? And Adam from MacBank, we can trust him, can't we? (Adam who?) "Zinc Gains in London on Speculation Declines Were Exaggerated By Brett Foley Feb. 5 (Bloomberg) -- Zinc gained in London, rebounding from the largest weekly drop in at least 17 years, on speculation price declines were exaggerated and demand and supply will continue to be closely matched.

The metal used to galvanize steel more than doubled to a record last year amid rising demand from China. Prices on the London Metal Exchange slumped 15 percent last week as analysts including those at Barclays Capital cut 2007 price forecasts. ``We believe the zinc market will remain relatively tight in the first half and we expect a bounce in pricing, although not to levels we saw last year,'' said Adam Rowley, a London- based analyst with Macquarie Bank.

In my view, when we look at metals, we have to access the fundamental, technical and funds' intention.

Zinc fundamental has indeed improved due to rising demand in China.
But funds have been selling call options, and chart still look unconvincing. I rather not take a long position on zinc futures now.

 

[Kauri]

Well they wouldn't lie on TV would they? On Bloomberg? Would they?? And Adam from MacBank, we can trust him, can't we? (Adam who?) "Zinc Gains in London on Speculation Declines Were Exaggerated By Brett Foley Feb. 5 (Bloomberg) -- Zinc gained in London, rebounding from the largest weekly drop in at least 17 years, on speculation price declines were exaggerated and demand and supply will continue to be closely matched.

drmb... love your humour They may be right, but they can prove it with their own money, not mine. Even dead cats have been known to bounce. I want to see the cat get up and run...

 

[nizar]

Zinc fundamental has indeed improved due to rising demand in China.

I read somewhere that China became a net exporter (of zinc) in 2006 (?)

 

[dhukka]

Meanwhile, Red Kite plans to extend the notice period for redemptions. The investors will now be required to send redemption notices to the fund by February 15 in order to get their money back at the end of the first quarter.
"Given the current size of the fund we believe that to maintain efficient operation it is necessary to increase the withdrawal notice period," Red Kite said in a statement.

These Hedge Fund monkeys are hilarious. That last sentence could be interpreted it as "because the market has gone against us and we are losing money hand over fist we want to change the rules." Imagine if investors long ZFX call options with a Feb expiry asked the ASX if they could postpone that expiry date until March because the market didn't go the way they expected. You'd get laughed at and rightfully so.

 

[imajica]

zinc stockpiles are still extremely low - demand will only increase

even if large deposits are found around the globe it will take many years before these will be mined - the next few years will be bullish for zinc - of course there will be corrections but overall its going up

this hedge fund manipulation is pathetic and will only have an effect on the short term

 

[BREND]

I read somewhere that China became a net exporter (of zinc) in 2006 (?)

Only in 2006.