Jump to content

Metals


theflasherman
 Share

Recommended Posts

Substitution

 

Substitution of nickel with other products,

lowering Nickel content in other products,

has been taking place all year.

 

That is WHY nickel trades under $8 us/lb

 

(Don't worry I follow the situation closely.)

 

Dr. Ivor Kirman, President of the Nickel Institute, explains the "What about substitution?" question pretty well in article at,

 

http://www.nickelinstitute.org/index.cfm/ci_id/12954.htm

 

;;

Here's some comments from,

 

Raymond J. Goldie

Salman Partners Inc.

Toronto

 

http://www.pdac.ca/pdac/publications/paper...prgm-goldie.pdf

 

 

Subtitution

 

One way to address the shortage of nickel could be by substitution of other materials.

LetÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢s look at what history tells us about substitution. In the 24-month period 1988 to

1989, which saw the last spike in nickel prices, nickel averaged US$6.17 per pound. Inco

has analyzed this period, and found that substitution affected only the alloy steel and

plating businesses. Other applications of nickel, notably stainless steel, increased over

1987ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢s level.

 

China

 

In 2003, ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¾ of the worldÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢s growth in nickel consumption came from China. In terms of

actual tonnages, ChinaÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢s consumption of stainless steel grew from 0.2 million tonnes in

1990 to 4.5 million tonnes in 2003, when China accounted for 20% of the worldÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢s

consumption of stainless steel. That figure is likely to continue to increase.

 

China consumes about 3 kg of stainless steel per capita per year.

 

For comparison, Korea currently consumes about 21 kg per capita per year and Taiwan, 25.

 

 

*******

while the last paragraphs talk about nickel only I believe a similiar situation applys in other base metals???(anybody have figures?)??

 

*******

 

Cheers.

 

P.S I would love it if somebody else was to post links & comments (good or bad) about Nickel under Nickel posts.

 

 

 

 

 

Link to comment
Share on other sites

  • 2 weeks later...
  • Replies 39
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

Talk about a strong comeback http://www.ShareScene.com/html/emoticons/smile.gif

 

Check out the charts here,

 

http://www.kitcometals.com/charts/

 

A excellent performance by copper inparticular up 6.5%.

 

The .25% rise in Chinese interest rates means base metal prices will stay strong for a long time yet.

 

Cheers.

Link to comment
Share on other sites

Bsse metals look like they are suffering from profit taking & are subsequently mostly down.

 

The 6 months chart suggests however that base metals are in an uptrend & we have seen current lows.

 

Fundamentals I believe back up the chart.

 

New highs over the couple/few weeks???????????

 

Cheers.

 

post-37-1099315880.gif

Link to comment
Share on other sites

In reply to: tom924 on Tuesday 02/11/04 12:31am

Funds look to be getting out of oil & back into metals;

 

Daily Market Analysis

11/04 Comex Copper Review: 3-Week Highs; Nearing Key Fibonacci Levels

11/04 LME Review: Mostly Up; Fund Buying In Copper, Aluminum

11/04 Comex Copper Midday: Hits 3-Week Highs On Fund Buying

11/04 Market Special: LME Aluminum, Copper, Nickel At 3-Week High

11/04 Market Special: Gold Surges $8 On Dollar Woes

11/04 Comex Copper Pre-Open: Up 190 Pts After LME Gains

11/04 LME Midday: Up; Copper Above $2,900/MT As Shorts Cover, Dlr Down

11/04 China Copper Futures End Mostly Dn On Profit Taking

11/04 LME Metals In Asia: Prices Rangebound, No Election Impact

 

 

It was a good night for metals last night all round.

 

Cheers.

Link to comment
Share on other sites

  • 2 weeks later...

Emerging markets eroding global commodity supplies

 

The commodities market has undergone structural change and recent share price rises in the sector will be supported by low inventories, according to Ian Henderson, manager of the JPMF Natural Resources fund.

 

He believes the commodities industry has not fully prepared for the continued increase in consumption alongside falling supplies.

 

He said: "Although base metal prices have recently risen strongly, it is important to remember the sector has been in deflation since 1988. The weighted basket of London Metal Exchange traded commodity prices remains more than 30% below its 1988 peak. The gold price is also low compared with its high of $835 per ounce back in 1980. On a historic basis, there is plenty of support for prices to rise."

 

Henderson believes that rather than anticipating a downturn after recent rises, continued demand will support prices.

 

"The vast majority of the world's population is only beginning to consume raw materials," he said. "There are currently only eight cars per 1,000 households in China, compared with over 500 in Japan and more than 900 in the US. Per capita consumption of copper in China is expected to increase by at least 10% compound over the next 10 years."

 

Added to this is his assessment that supplies are falling. Henderson believes that, as of late October, stocks of iron ore were equivalent to just a week's consumption, while it was only 2.2 weeks for copper and lead and around five weeks for nickel and zinc.

 

He believes analysts have failed to keep their price estimates up to date and believes there is scope for substantial upward revisions in near and medium-term company earnings prospects, which could provide further support for share prices in the sector.

 

http://www.trustnet.com/general/news/displ...63479&db=market

 

It makes sense to me http://www.ShareScene.com/html/emoticons/smile.gif

 

cheers.

Link to comment
Share on other sites

Friday November 19, 3:51 PM

INTERVIEW: China Base Metal Demand Seen Up 10%-15% In 05

By Jeffrey Ng

 

Of DOW JONES NEWSWIRES

 

 

HONG KONG (Dow Jones)--China's demand for base metals is expected to grow by 10% to 15% next year - far slower than the expansion of recent years - as the government succeeds in its efforts to cool the red-hot economy, says an executive at Australia-based Macquarie Bank Ltd. (MBL.AU).

 

The bank's executive director of commodities and mining research, Jim Lennon, said growth in China's demand for base metals, such as copper, aluminum, steel and nickel, declined substantially in the second half of 2004 due to Beijing's cooling measures.

 

"Demand was growing at an unsustainable rate," Lennon told Dow Jones Newswires. "The authorities had to bring things back under control because there was a real risk of a bubble developing."

 

China's policymakers have implemented a series of macroeconomic controls over the past year to rein in investment in overheating sectors, including property development, steel and construction materials making, and automaking.

 

Among base metals, growth in China's steel demand has fallen most, expanding 9% on year in June compared with 19.3% in May, according to data compiled Macquarie's research team.

 

Lennon attributed the sharp drop to a slowdown in construction activity, one of the sectors targeted by Beijing.

 

Growth in China's demand for copper also declined, albeit at a more moderate rate, to 12.9% on year in July from 23.9% in June.

 

For 2005, Lennon expects growth in the country's demand for steel, copper and other base metals to be higher than in the second half of this year due to the economy's strong growth momentum.

 

"We do see a transition to a slower rate of growth, but we don't see any reason to panic," he said.

 

"The authorities have demonstrated great flexibility in terms of bringing growth down and got to the problem before it developed into a serious one."

 

Lennon said last year's 20% to 25% average growth in base metals demand would have been impossible to maintain as infrastructure bottlenecks are forming in China's economy.

 

With the successful implementation of Beijing's tightening measures, Lennon said he expects growth to steady at around 10% to 15% in 2005.

 

The softening in demand for base metals in China will likely be echoed in the rest of the world in 2005 due to the prospect of weaker global economic conditions.

 

"Next year there might even be negative demand growth in the U.S," Lennon said. "This year there has been a lot of overstocking and restocking and there are still ongoing concerns with the structural issues like the very large budget and trade deficits."

 

Despite weaker demand growth globally, Lennon said he believes base metal prices generally won't collapse, and copper and nickel prices could even rise in coming months due to tight global supply and still-strong demand from China.

 

Demand for copper is being boosted by China's power sector, with generators scrambling to boost capacity as the country faces its most serious power crunch in years.

 

"This has caused a major positive impact on the global copper market," said Lennon.

 

***********

 

Yep, miners are still looking good for a long time yet.

 

cheers.

Link to comment
Share on other sites

In reply to: tom924 on Saturday 20/11/04 12:53am

SANTIAGO (Dow Jones)--Current sky-high copper prices won't last in the long

run, Charles Goodyear, Chief Executive of mining giant BHP Billiton (BHP), said

Friday in a press conference.

"One has to take care in looking at the price today and assuming it's

sustainable over the next 18 months," Goodyear said.

Earlier Friday in London, copper closed at 144.42 cents a pound, while

three-month copper closed at 139.16 cents/lb.

Boosted by huge demand from China and some industrialized countries and a lack

of supply, copper prices have surged to near 15-year highs in a year-old rally

after dropping to historic lows in the previous five years.

BHP will produce roughly one million tons of copper this year, said Diego

Hernandez, President of BHP Billiton Base Metals. The company will continue to

seek to develop high-yield, low-cost sites that will remain profitable in the

long haul as the rise of copper prices will spark new production, reducing the

demand overhang affecting the industry.

"We don't need prices as high as they are now to have a profitable industry,"

Goodyear said.

Additionally, the industry lacks quality sites and new graduates with the

capacity to strongly increase copper mining output. Regarding other commodities

prices, Goodyear said BHP will announce coking coal prices once it has closed a

majority of annual contracts with Japanese steel mills early next year. He

declined to say at what price the deals could close, but considering price

developments, increases as estimated by analysts provide orientation, he added.

He also declined to comment on reports that BHP wants to take over industry

peers such as WMC Resources Ltd (WMC) or Noranda Inc. (NRD).

The BHP executives spoke during a meeting of the Asia-Pacific Economic

Cooperation forum's CEO conference, held to accompany this weekend's APEC

leaders summit in the Chilean capital.

On the ongoing controversy of the Chilean government's plan to refloat a

mining royalty bill, contracts signed under current rules protect BHP's current

$2.27 billion local investment plan through 2007, Hernandez said.

The government's first bill died in Congress in August as it couldn't muster

the necessary votes. BHP would "try to educate the constituency" but the legal

framework is "ultimately up to the country," Goodyear said.

Chile is the world's largest copper producer, responsible for some 30% of

total annual output.

 

Link to comment
Share on other sites

Base Metals are up strongly across the board tonight,

 

Live Spot Prices

 

SPOT MARKET IS OPEN

closes in 58 hrs. 3 mins.

change since 19:00 London Time

Price: US$/lb

 

 

Copper ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Nov 24, 08:53

Bid/Ask 1.4670 - 1.4693

Change +0.0194 +1.34%

Low/High 1.4409 - 1.4693

Charts

 

Nickel ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Nov 24, 08:55

Bid/Ask 6.6237 - 6.6238

Change +0.3005 +4.75%

Low/High 6.3231 - 6.6917

Charts

 

Aluminum ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Nov 24, 08:55

Bid/Ask 0.8284 - 0.8289

Change +0.0181 +2.24%

Low/High 0.8103 - 0.8302

Charts

 

Zinc ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Nov 24, 08:55

Bid/Ask 0.5191 - 0.5213

Change +0.0078 +1.52%

Low/High 0.5099 - 0.5213

Charts

 

Lead ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Nov 24, 08:50

Bid/Ask 0.4532 - 0.4546

Change +0.0067 +1.51%

Low/High 0.4465 - 0.4550

Charts

 

http://www.kitcometals.com/

 

cheers.

Link to comment
Share on other sites

  • 1 month later...

Metals boom is not over

January 9, 2005

 

Demand from China will ensure metal prices remain high.

 

Metals soar in 2004

 

Most analysts agree that steady demand from China will keep prices high, writes Richard Webb.

 

Don't sell your resource shares just yet. Metal prices plunged by up to 8 per cent last week but analysts believe the falls are temporary. They say the commodity boom is far from over.

 

While they believe commodity prices will not soar this year like they did during last year's metal pricing bonanza, practically all expect base metal prices to remain at historically high levels - high enough for Australia's big miners such as BHP Billiton and Rio Tinto to turn in record profits.

 

Demand for raw materials from China remains strong, they say, and there is no sign of the booming Chinese economy making a crash landing soon. Chinese demand has been supporting decade-high prices in many raw materials and as such there seems little chance that commodity prices will fall sharply in coming months.

 

Shane Oliver, head of investment strategy at AMP Capital Investors, says the prices of base metals such as copper, nickel and zinc will continue to rise this year, but not at anything like the rate at which they soared in 2004.

 

"There is further upside there," he said. "The best is behind us in terms of the price momentum but stockpiles of most metals around the world remain extremely low while demand remains strong."

 

One of the elements of last year's metals price boom was that metal stockpiles also plunged when the prices soared. These stockpiles will need to be replenished this year, and this will increase demand even if global economic growth begins to slow.

 

Deutsche Bank head of global markets research David Plank says the CRB index - which measures a broad range of commodities including copper, gold, nickel and oil - is less than 3 per cent below its high of just before Christmas, despite last week's base metals rout.

 

"While small moves can have a big impact on the pocket, what we are seeing are squiggles in the data at the moment. It's not the end of the global boom, it's more an adjustment at the margin," he said.

 

In a report last week, Goldman Sachs JBWere deemed any pullback in the share price of the major resource stocks to be a buying opportunity. The stockbroker retained its overweight resource sector recommendation.

 

"Our belief in the longer-term 'stronger for longer' theme is unchanged, and we would continue to view any pullback in the sector as a buying opportunity," it said.

 

The ABN Amro commodities team is not so sure. They believe the fourth quarter of 2004 will be seen as the peak of this commodity cycle, and while prices will not necessarily tumble this year - mainly because metal stockpiles fell so dramatically last year - they believe there is a chance metals prices will begin to ease.

 

"In general, 2005 looks to be a transition year for base metal markets. Having enjoyed deep inventory draining deficits in 2004, we expect markets to start moving to balance, notably in the second half of 2005," ABN Amro said.

 

Metal markets were clearly spooked last week. There were two reasons for this: a sharp rise in the greenback and the re-emergence of concern over the slowing Chinese economy.

 

The US dollar jumped following the release of minutes from the December Federal Reserve board meeting, which indicated the US central bank would push interest rates up quicker than some had anticipated this year. Higher interest rates support a currency.

 

Base metals are traded around the world in US dollar prices. When the US dollar rises, base metal prices fall because a rising greenback means that metals become more expensive for non-US buyers.

 

Dr Oliver believes the greenback will eventually start heading lower again. "I think the broader trend in the US dollar is down. The US dollar has been falling because of the trade and budget deficits and the trade deficit is at a record level and getting worse."

 

Concern over China has been bobbing up every so often for months, and emerged again last week following news that the Chinese Government would not approve any additional aeroplane deliveries this year.

 

There are already 147 planes due for delivery to Chinese airlines this year, and a Chinese official said this was enough to meet demand. Because of that, no further approvals would be made, he said.

 

But two days later there was another report that China Southern Airlines, the country's largest domestic carrier, was about to make a $US2.4 billion ($A3.2 billion) order for 20 Boeing 7E7 jets, for delivery for the Beijing Olympic Games in 2008.

 

Dr Oliver said concerns over China were being overplayed.

 

"The Chinese economy is slowing from 10 per cent annual growth to about 8 per cent, which is still very strong. It's a very soft landing if you can call it a landing at all," he said. "Inflation is running at 2.8 per cent, so they don't have a problem there, and the unemployment rate is still reasonably high."

 

http://www.theage.com.au/articles/2005/01/...l?oneclick=true

 

 

Link to comment
Share on other sites

  • 2 weeks later...

Base Metals lead the charge in 2005

 

Manufacturers predict bumper year

David Uren, Economics correspondent

January 17, 2005

 

"The strongest investment increase will be in chemicals, construction materials, basic metal products and machinery, which are all expecting a growth of 20 per cent or more."

 

http://www.theaustralian.news.com.au/commo...255E643,00.html

 

Miners to give market a push up

Katherine Jimenez

January 17, 2005

 

RENEWED investor appetite for mining stocks should buoy the local market this week.

 

Last week, investors made a late charge for mining stocks, including BHP Billiton and Rio Tinto, amid optimism that commodity prices are still climbing.

 

Rio Tinto has asked Japan's biggest steelmaker to pay 50 per cent more for its iron ore, according to one Japanese newspaper report last week.

 

Analysts remain upbeat, with Deutsche Bank issuing a research note forecasting "strong commodity prices with big hikes in steel-making inputs".

 

Rival ABN Amro agreed: "Mining stocks have performed very strongly, and (buying them) is a call that many people feel comfortable with."

 

http://www.theaustralian.news.com.au/commo...255E643,00.html

 

Is anybody surprised??

 

Cheers.

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share


×
×
  • Create New...