KippKipp said:Here's an odd thought... Mines operate 7 days a week (well, maybe not BMO but most do...) yet the metal markets are only open Mon-Fri. So does that mean Friday's spot prices are the accepted price for the weekend (and therefore carry more significance than Mon-Thurs clsoing prices)? Or have I missed something here???
rederob said:Kipp
Not quite sure of your point, but will try a reply.
Metals producers have 3 major options/choices to sell their metal.
Most will deliver into long term "offtake" contracts. Often these contracts will use LME benchmarked average prices, but not always.
Secondly, some metal may be delivered into "hedge" contracts. That is, the company has entered the market to forward sell an agreed quantity of metal at a set price. In the present bull market most of these hedge contracts have a negative mark to market value - that is, they involve selling metal at a lesser price than the prevailing price.
Unhedged producers that sell some or all (tho can't believe anyone would be selling all) their metal into the spot market have the advantage of being exposed to rising prices. Their disadvantage would be when the market turned sour and their profits reduced commensurately.
Producers will opten mix and match some of these options in order to "balance" their market risk. For example, recently a gold miner (Croesus) has been unable to satisfy its hedge commitments and is presently under administration because it does not have the finances to buy its way out of its bind. Croesus had the double problem of poor forward prices in a rising market, and inability to meet contracted quantities for delivery.
This may not answer your question, Kipp, so you might want to use the above info to rephrase it.
Kipp said:Thanks for the reply Rob. Yes, I am aware of choice of selling unhedged vs. hedged. No worries, that is not my quesiton here.
If a producer is selling metals at LME prices, what prices would be received for metal sold over the weekend? Or is the answer the fairly obvious one, that NO metal is traded over the weekend but rather stockpiled till the LME markets open Monday (though mines/smelters are in production).
My question is just one of academic interest, not of any great importance.
YOUNG_TRADER said:Would appreciate a post of LME Stock levels please
tour said:hi.
Hmmm i was just wondering why there is no inventory out for copper? its being incresing every since. and today another 1000+
thxs
Hmmm... looks like most of the metal to leave the LME in the last month has just been cancellations. "On warrant" sitting steady today 16th Aug at 145K.YOUNG_TRADER said:This is strange, while there was a large sized add in halting the total zinc stock level just above 200kt's, the On Warrant Figure has dropped down to 145kt's from 155kt's last week,
LME Warehouse Stocks 17 Jul 2006
Close In Out +/- On Warrant Cancelled
Zinc 202700 3550 1425 2125 145075 57625
Kipp said:Hmmm... looks like most of the metal to leave the LME in the last month has just been cancellations. "On warrant" sitting steady today 16th Aug at 145K.
Is supply catching up with demand? MS are you still expecting LME to be out of stock by Sept-Oct?
KippKipp said:Hmmm... looks like most of the metal to leave the LME in the last month has just been cancellations. "On warrant" sitting steady today 16th Aug at 145K.
Is supply catching up with demand? MS are you still expecting LME to be out of stock by Sept-Oct?
rederob said:Kipp
Based on trend I expect a minimum of 120 trading days before we see zinc around 10,000 tonnes at LME.
What will happen when we get below 50,000 tonnes is that the rate of decline slows as prices increase, and this equation prevents a drying up of inventory as it makes more sense to deliver any surplus metal to LME spot than hold on site.
In any event, investors that do not have a major zinc producer in their portfolio will miss out on some good returns in the next 12 monhts.
Or try the one that has inventories alone:YOUNG_TRADER said:There you go Kipperhttp://www.basemetals.com/
Kipp said:Hey Rob- could you please post your nice LME sheet to see where the Zinc supplies are at? I'm keen to see if it has breached 140K yet or if the declines are just cancelled stock getting shipped out.
Though I find it hard to doubt your bullish opinion on Zinc after you called the Nickel shots so well. Screaming towards $15/lb tonight.... can Zinc do the same?
Thanks.
K
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