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Archive through February 02, 2005

Chart Forum » Commodities & Futures » Commodities - base metals/oil » Archive through February 02, 2005

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vermante
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Post Number: 206
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Tuesday, January 04, 2005 - 07:56 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks again rederob.

Re Base metals - The base metals index is certainly bullish as seen in the 5 year chart. My concern is will it keep rising. With now the general public and taxi drivers talking about the weak U.S dollar , it may be a strong signal that the U.S dollar is about to reverse and strenghten.Couple that with higher interest rates in the U.S. and the rise in Gold , Silver and the base metal index may be curtailed.

Interesting times ahead.

Cheers

Vermante

(Message edited by vermante on January 04, 2005)


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rederob
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Tuesday, January 04, 2005 - 08:52 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



vermante
At this stage there is nothing to suggest a trend reversal in the base metals complex, so I would not be concerned.
As for the taxi drivers talking about a weak US dollar, that's still a "positive".
The negative is when they start to give you advice on which euro bonds to buy and tell you to keep clear of the yen as it's too closely tied to the greenback.
Worse still, they may even tell you to load up with gold bullion - then it's time to get out the worry beads.
Of course, taxi driver and hairdresser recommendations must first be strongly positively correlated.
ps, the game is over when Dubya tells his loyal supporters that buying gold is not going to protect them.







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vermante
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Wednesday, January 05, 2005 - 07:15 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



rederob,

Based on overnight market action , the worry beads are out in the short term re-Gold-Silver-and Base Metals. BHP down 4% in London over night. You may yet get to buy BHP at an attractive price over the next couple of days/weeks. ?

Cheers

Vermante


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rederob
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Wednesday, January 05, 2005 - 08:04 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



True vermante.
The following is borrowed from an article in the Financial Times overnight - behold the carnage.....

Base metal markets were hit by frenetic selling on Tuesday as the dollar continued to rally and amid concern over slowing Chinese demand.
Aluminium, which peaked at $1,972 per tonne last week, on Tuesday fell more than 8 per cent to $1,797.5 per tonne - its biggest one-day fall in 17 years.
In the week between Christmas and new year, aluminium hit a 9½-year high, rising to levels that many analysts called "overbought".
Having been closed on Monday for a public holiday, traders came back to the London Metal Exchange confronted by a strong dollar rally and saw it as a signal to sell.
Copper had a similarly precipitous fall - from last week's peak of $3,165 per tonne - down almost 8 per cent to $2,905 per tonne.
"Many base metals had hit multi-year highs at the end of last year, and stops were triggered," said Will Armitage at IG Index.
Copper prices rose 34 per cent last year, aluminium rose 21 per cent and there were double-digit gains for lead, zinc and tin.
The rises came amid frequent warnings of a slowdown in global growth in 2005. China, the world's biggest consumer of copper, is likely to see a slowing of its economic growth this year, with Barclays Capital warning that China's copper consumption will only rise by 10 per cent this year, after 15 per cent in 2004.
"Base metal prices were savaged as aggressive selling and a dearth of buying interest pushed all the contracts sharply lower," said Alan Williamson at HSBC.
"Early selling pressure from China in the copper market spread to the aluminium contract and as prices began to fall this triggered wave after wave of long liquidation by the momentum and technically driven funds," he added.
Analysts said further long liquidation was likely in the short term, particularly if the dollar continued to gain ground.
"We think we have seen the top of the commodity cycle," said Nick Moore in an interview with Bloomberg. "We are in the endgame."
The falls in base metals prices meant mining stocks turned out to be some of the biggest losers in the stock market on Tuesday.
In London, the biggest faller was Xstrata, down 4.8 per cent to 887½p. This was followed closely by BHP Billiton, off 4 per cent at 596p, Rio Tinto, down 3.3 per cent to £14.83, and Anglo American, which shed 1.6 per cent to £12.07.



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rederob
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Thursday, January 06, 2005 - 04:25 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



After Tuesday's carnage BHP in Oz gave up very little (less than 2% cf 4% in London) and closed today over $15.
In fact, apart from tin, all the base metals have closed near or above their long term support lines - in the case of nickel a substantial fall can occur before hitting support - and they rallied slightly overnight (apart from lead).
While we are in the "silly season", thin trading conditions can blindside us to the trends, and and these remain fundamentally unchanged:
Most base metal warehouse stocks are either declining overall or balancing destocking with replenishment week-on-week: And this in an environment of long-term backwardation for several of the metals.
Global demand may decline this year in percentage terms, but in total tonnage terms will still markedly outstrip 2004 on present indicators: The question unanswered thus far is if several of the metals will deplete warehouse stocks entirely before ramped up production can rebalance the ledger.
Currently the supply/demand equation suggests upside will continue medium term.
Moreover, if the legacy of thin warehouse levels is not quickly turned around via the much vaunted mid-year replenishment phase, the second half of 2005 could be better than the first.
Let's see how the dust settles later this month.


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rederob
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Saturday, January 08, 2005 - 01:18 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Although precious metals hit a chord with the greenback and sang an ugly tune, by Thursday base metals were in harmony with their fundamentals and recording some nice highs by week’s end.
Backwardation on copper, nickel and lead continues to climb, while zinc prices crept higher despite a large warehouse addition midweek.
Oil prices have not fallen below $40/bbl as was suggested due to the “milder” US winter and present momentum is taking it back to $45 range.
With thin trading volumes largely behind us for another 11 months we shall get a clearer picture of overall market direction by month’s end.
I won’t sit on the fence with cute language; I can see nothing yet to suggest either a slowdown in demand or the prospect of lower medium term prices.
Throughout 2004 most producers and suppliers successively increased prices.
These have been absorbed by the market with little fuss.
While we may not, in equities, see the stellar returns of the past year, the fact is that most are going to make record profits this financial year – there may even be some reasonable dividends on offer for a change.
Miners also have the multiple benefit of (a) reinvestment in capital equipment (b) reduction of debt and (c) increased exploration activity.
This latter aspect not only adds to the miner’s ore reserves, but occasionally leads to a bumper new find.
Happy days……


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rederob
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Wednesday, January 12, 2005 - 05:19 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



This time last year everyone was excessively bullish on base metals and rightly so.
Now there are two distinct 2005 camps.
First come believers in the red hot China economy, and;
Second are believers of the meltdown economy - literally a China syndrome.
I am firmly in the former camp.
Those contemplating a meltdown are, for the moment, on thin ice.
China should slow its pace of growth.
It has taken steps throughout the latter part of 2004 to ensure a "soft landing", and the recent trade balance data suggests it's working.
One of the better, recent, articles on commodities is at:
http://www.resourceinvestor.com/pebble.asp?relid=7749
Specialist metals analysts generally see a strong first half for base metals in 2005, with the prospect of slippage in the second half.
Restocking is seen as the key to 2nd half prices falling as ramped up production more than meets demand.
But beware.
The greenback is locking itself in for another dramatic slide in 2005 and this may well coincide with metals restocking in the 2nd half. If so, metal prices are poised for further rises, although Oz equities would be slugged on exchange rates.
My early prognosis is for base metals on average to increase by 10%plus in 2005.
Moreover, in the first half I will not be surprised by price increases greater that 30% at some point before markets start to settle.
Early signs this week are exceptionally supportive of base metals, so let the good times rock and roll.


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rederob
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Friday, January 14, 2005 - 09:39 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



It's been a while since I last posted inventories, so early in 2005 this is where we stand:
London Metal Exchange Warehouse Stocks
Metal Tonnes in Storage Change from
previous day
Aluminum 700,925 -2225
Copper 44,650 -1525
Nickel 19,704 -126
Lead 38,900 -275
Zinc 633,875 -2350

New York Futures Market Warehouse Stocks
Metal Tons in Storage Change from
previous day
Aluminum 84,954 -1362
Copper 48,447 -8

Those interested in following metal inventories can go to:
http://www.kitcometals.com/
With Chinese aluminium exports likely to tail off over coming months it will interesting to see how COMEX stocks hold up (if at all).

You probably realise that metal prices are responsive to greenback movements, but don't take the obvious as gospel in this climate of thin metal markets.
Tonight, for example, base metals are barely affected by a significantly stronger greenback (indeed copper is up about a cent/lb as I write).
More likely, speculation, gossip and rumour will drive prices strongly in any direction, especially if given credence by mainstream media.
I will keep making the point, don't be blindsided by irrelevance. If metals continue to drawdown, demand is stronger than supply - it's that simple (especially when this has been the trend for most base metals for a year or longer).
Briefly on nickel: This metal accumulated warehouse stock levels for several months, until the past week or so when the trend changed sharply.
Why?
Some consumers actually stopped buying steel!!! For example, a few Japanese car manufacturers closed down assembly lines for a few weeks.
Norilsk was also delivering nickel to UK warehouses where there was no local demand.
In other words, there were disparate attempts to manipulate nickel's price downward.
However, real demand was simply suppressed short term, and is now returning with a vengeance.
In the second quarter Norilsk loses a month or so of shipments due to annual flooding. Plus Inco shut down its Copper Cliffs smelter and Minara shuts down Murrin Murrin for repairs. Gross effect could be as much as 80,000tonnes unavailable - a bit of a problem when there is only 20,000tonnes in LME warehouses.
And a quick aside to Justice: I have not got onto ZFX yet - the beggar won't fall into my buying range......


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rederob
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Monday, January 17, 2005 - 09:58 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Across the board LME warehouse drawdowns again tonight.
RIO and BHP jumped today and BHP will likely break $16/share within the week.
Iron Ore prices are set to jump again via Asian consumer (largely Japanese) contract negotiations - nickel is a dead cert to be carried higher, too.
Copper demand remains strong, so the below chart gives a good idea where prices could be next month.


Last year I suggested that by the time OXR is producing copper, it would be around $1.50/lb. Given that most of the sums for OXR were done when copper was only 80cents/lb, this is one stock that remains grossly undervalued - largely because copper is "discounted" by traders in favour of OXR's gold exposure. I think OXR will be trading well above $1.30 within 6 months, with a price target of $1.50 in mind.


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ingot54
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Thursday, January 20, 2005 - 06:46 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rederob

This article is copyright, but may be read in entirety at the air.com.au site, as you know. I reproduce the feeder notes only ...

Enjoy our daily stories, but don't forget it's a weekly magazine. Download the latest issue HERE

Chinese Smelter Cut Triggers Zinc Rise
Zinc prices rose by 2.8% on Wednesday to reach a new 7 year high. The already bullish market was given an extra boost, commodity specialists at Macquarie report, by reports that the Zhuzhou smelter in China would cut production by 100,000t at least until April.It is a ...


Just goes to show how quickly things turn around. ZFX closed slightly lower today, after a small rally yesterday. My interest is only in seeing how the price of ZFX responds to the Fundamentals.

For example, whether this kind of news was known to the more astute followers of the metals market, and whether such things are factored in already.


It's much easier to ride a horse in the direction it's going - Abe Lincoln.

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rederob
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Thursday, January 20, 2005 - 07:16 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



ingot
China's power issues are being slowly and methodically addressed. But until they are, aluminium and zinc smelters, which draw massive amounts of electricity, will continue to suffer periodic closures.
Zhuzhou accounts for about 3% of world output, so it's a big player.
However, I think the "astute" players are more aware of this year's touted zinc supply deficit and holding long positions on this premise, rather than Zhuzhou's outage.
Overnight the greenback toyed with metal markets, and ZFX was a minor casualty in the Oz equities sector.
I seemed to have missed ZFX run by trying to get in too cheaply - still hoping for that retrace!
Tho next week I fear will be a sellers market in commodities as the greenback's near term rally has little left imo.
As is always the case, time shall tell.


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rederob
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Saturday, January 22, 2005 - 10:01 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



A vote of thanks to the reader that puts one star next to my posts - but you did miss the one of 12 January - helps me quickly scan back to previous posts as reference source.
To the real action:
Oil spiked 2% overnight as the big freeze sets in over NE USA and heating oil supplies are already 13% lower than same time last year: Nearing the psychological $50/bbl whish stands a chance of becoming support in 2005:
OPEC meet next on 30 January and are likely to leave quotas unchanged or perhaps, trim back a touch.
Base metals had a firm night, bar nickel (which fell back just slightly). The result was spurred by a slight decrease in the greenback, but against higher energy prices.
Consistent LME inventory drawdowns remain in play across the complex and will probably drive most base metals (except tin) to record highs over the next quarter.
There are always the usual caveats to performance - in this case will the US hit a roadblock near term, and /or will China go off the boil.
In the case of USA, mixed messages abound.
In the case of China, we simply want to be told whether the growth rate is nearer 6% or 10% - ie, good news or sheer jubilation!


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rederob
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Saturday, January 22, 2005 - 12:08 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



BREAKING NEWS: Globe and Mail

POSTED AT 2:12 PM EST Friday, Jan 21, 2005
Zinc price soars to 7-year high

"The three-month future price of zinc reached a seven-year high Friday on the London Metal Exchange as a result of Chinese smelter shutdowns.

The cash price of zinc traded at 58 cents (U.S.) a pound on the LME.

Zinc has lagged other base metals like copper and nickel. Zinc traded at 45 cents a pound in September.

The metal could average 59 cents a pound during 2005 as a result of mine supply shortages, Deutsche Bank also said in a report on Friday."


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rederob
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Tuesday, January 25, 2005 - 07:52 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Finally a few good additions to warehouse stock levels - namely LME copper and zinc:
London Metal Exchange Warehouse Stocks
Metal Tonnes in Storage Change from
previous day
Aluminum 685,275 -2275
Copper 44,125 +600
Nickel 18,012 -24
Lead 37,375 -200
Zinc 624,525 +3450
New York Futures Market Warehouse Stocks
Metal Tons in Storage Change from
previous day
Aluminum 84,373 -1387
Copper 47,415 -22

However, copper's cancelled warrants tell a story of continuing drawdowns (cancelled warrants seldom falling below 20% of available stock).
Add to this China's 9.5% growth last quarter - against consensus forecasts - and commodities are the sector to be safely in medium term.
BHP today closed over $16 and has a lot more steam building up - medium term target of $18 could be conservative. I prefer BHP to RIO as its metals diversity is giving it more upside and stability, while having oil in its portfolio remains a huge plus. (Might have sold myself on getting back into BHP, irrespective of present price!!)
On the issue of oil, energy prices will somewhat constrain base metals rising near term, but that's a good thing. The less volatile the equities, the steadier they rise and the less likely they sink titanically when an iceberg emerges.


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perler59
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Wednesday, January 26, 2005 - 01:16 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The oil price is becoming interesting. The close overnight is approaching the reversal price of $50.40 on 26/11/04. CCI-20 is flat-topping (for the 3rd time) indicating lack of momentum.

Light_Crude_25-01-04.PNG


I can NOT control the markets, so I MUST control myself.

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rederob
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Wednesday, January 26, 2005 - 07:09 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Always like your charts perler.
While technicals are all good and well, over the past year oil has responded closely to fundamental issues in terms of nearby direction.
In this instance we are looking at freezing conditions in NE USA, OPEC meeting on 30 Jan, and Iraq elections next day.
So for the next few days price direction will favour the upside.
It won't take too much to spike WTIC over pivotal $50.40/bbl.
But near term there is little to hold it up at those levels unless OPEC moves further cutbacks.
Note the medium term trend for oil remains upwards.
There are also few analysts tipping oil to go below $35 this year. Moreover, WTIC has not been below $40 since last July.
Cap this off with China using most oil ever in December - with no sign of that trend changing soon!


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hilarius
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Wednesday, January 26, 2005 - 07:19 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello rederob

I was reading where Iraqis have to queue for up to 8 hours to buy petrol and many have to return 2 days later or 4 days later, using a system of odd and even numbers at the end of the vehicle number plates which must correspond to odd and even numbered dates.

With such chaotic supply and security conditions the claim by Donald Rumsfeld to have sent in sufficient troops is little more than a tragic farce ...

The population should have been disarmed at the outset, but the USA is constitutionally incapable of depriving its own or any other citizens of the right to bear arms

What a shambles .... but it was a shambles before so which shambles is worse?

Hilarius


I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

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rederob
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Wednesday, January 26, 2005 - 09:57 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Salutations Bro Hilarius
A great read on Iraq's oil situation is at:
http://www.eia.doe.gov/emeu/cabs/iraq.html
Lack of oil refining capacity seems part of Iraq's internal problem as there certainly is enough oil being pumped to meet the nation's demand.
With 11,000km of oil pipelines to protect, even blind Iraqi insurgents could do damage!
If ever the real plan was to get Iraqi oil, the US should have done more research on what they were dealing with.
Almost 2 years afterwards and about a million bbls/day less oil is being produced.
If insurgency is not controlled, even getting back to pre-war production levels could be a few years off.
Long term, Iraq is a gold mine of oil - only 1,600 wells compared to about million in Texas - and little exploration done in known areas of prospectivity.
Every chance that Iraq has over 200 billion bbls of oil reserves (over 100 billion already proven).
At the moment I can't see the Iraqi's ever doing America any favours for turning them into a "democracy'.
So whatever war they think they one, they should be happy with - I doubt if it is a feeling widely shared.


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vermante
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Thursday, January 27, 2005 - 05:43 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Wall Street advice: Get heavy on metal

Refer -kitco.com




Cheers

Vermante


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vermante
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Thursday, January 27, 2005 - 06:07 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Contra View

JP Morgan cools it on metals


Extract

"These supply growth profiles, in combination with moderating demand growth, should ensure a moderate decline in metal prices through 2005 and 2006, but without prices returning to anywhere near the levels at which they began the current upturn."

Nickel prices are seen in a steady decline over the next three years, falling from an estimated average of $6 a pound this year to $5.19 and $4.80 in the following two. The price averaged about $6.24 last year.


year.

Vermante


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rederob
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Saturday, January 29, 2005 - 07:26 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Backwardation of base metals continues to increase in most complexes except zinc (presently at $10 contango).
Some large LME inventory drawdowns in aluminium, nickel and zinc are making market players nervous, especially after Shanghai's copper inventory fell to its lowest ever levels (note that LME copper rose during the week).
Cancelled warrants indicate next week's trend should be more of the same (25% of LME aluminium for example is accounted for via cancelled warrants, and 17% of nickel).
The greenback's recent run of strength has wilted like Roddick, so expect a bounce from the euro during February.
My view is that spot copper, aluminium and zinc will achieve substantial record highs in mid-late February:
My target prices/lb for the complexes are:
Nickel - $7.00
Copper - $1.50
Aluminium - $0.90
Zinc - $0.60
Lead - $0.48

As expected the blue chip miners have been to the forefront in equity performance, but while all eyes are on BHP, RIO and WMC, watch for the lesser miner's gains.


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ken
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Sunday, January 30, 2005 - 11:54 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello rederob,

Could you please explain backwardation?

Ken


Price is the leader of the market crowd. (Elder)
Members of the crowd follow the leader and experience the same emotions as each other.
To be independent of the crowd we must not change our behaviour with price.

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rederob
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Sunday, January 30, 2005 - 12:45 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



ken
Backwardation occurs when a commodity futures price is lower in the distant delivery months than in the near delivery months.
Typically commodity markets are in "contango" whereby the spot price (today's price) is lower than a future contract to buy or sell.
When demand exceeds supply, warehouse stocks dwindle and the typical situation is reversed, or runs "backward".
Most backwardation is expressed in terms of the difference between the "cash" (or spot) price and the nearby "3 month" futures contract: We call this the cash threes (cash/3s).


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rederob
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Monday, January 31, 2005 - 10:51 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Every now and again there is a nice confluence of factors that propel prices along.
In the case of nickel, there are some very interesting trends.
First, nickel has done little to inspire confidence since peaking over a year ago.
But look at the underlying trend: continuing upwards and at an increasing pace.
I am sure the TA folk will see things in the past 12 months' pattern that probably have a name of some description.
I just see $7.10 and $7.60/lb as near term resistance targets that are now quickly achievable:

Technically, nickel's RSI at 51 gives it plenty headroom.
But fundamentally this metal is ready to move sharply. Cancelled warrants have gone from about 5% a few weeks ago, to over 20% today - evidenced by strong inventory drawdowns over the period.
Plus we have iron and coking coal being shipped out of Australia as quickly as the ships can be turned around - and they need nickel to make steel. (Media reports about higher iron and coal prices have been bountiful over past months.)
Oil prices, which constrain commodities, have just dipped back again, and remain in the $40-$50/bbl corridor.
Finally, to achieve the "confluence", we are nearing the end of the greenback's rally.
A weaker greenback will give commodities a hefty boost.
There is just one fly in the ointment - China takes a break for a week or so during February, cooling commodities action.
My take on things is that once Chinese New Year festivities are over, the commodities boom will again be heard.







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rederob
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Username: rederob

Post Number: 588
Registered: 10-2002

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Wednesday, February 02, 2005 - 11:48 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Copper backwardation spun to almost $190 a tonne, and has turned the tide on LME inventories with a 1675 tonne rise tonight.
Nevertheless, cancelled warrants still represent about 20% of warehouse stock, so the copper market will remain tight for some time to come.
In terms of trade action tonight, it's curious to see most commodities rising firmly pre-Fed announcement, especially zinc which continues its gangbusters run.
Until Greenspan gets the interest rate decision out of the way and produces his market notes, we will remain on tenterhooks and markets could swing wildly after the entrails are read.
But that won't change commodity fundamentals that have shaken off some of the early year doubters: To the extent that Citibank is forecasting generally higher average base metal prices in 2005 than for 2004.
Citibank also came to the conclusion I did in that aluminium and zinc remain they better leveraged performers medium term.
Frankly, I long for a darn good correction in zinc, at least, or I will never get to own Zinifex shares.

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