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| Copper forecast in forum [SoftCommodities]
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Phirang
Posts: 10157
Incept: 2008-10-25
Flogging a "little person"
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Quote:
Feb. 2 (Bloomberg) -- Copper prices, which more than doubled last year, are set to plunge as speculators unwind positions and global inventories expand, according to David Threlkeld, president of metals trader Resolved Inc.
“We’re going to see a catastrophe in the market,” said Threlkeld, who first got the world’s attention in 1996 when he showed that hoarding by Sumitomo Corp.’s Yasuo Hamanaka would lead to a collapse. Prices may slump to less than $1 a pound, he said by phone. That about 67 percent less than today’s levels.
Copper, used in pipes and wires, sets the pace for other industrial metals. A slump in prices may reduce profits at mining companies including Freeport-McMoRan Copper & Gold Inc. and drag other commodity prices lower.
Some 90 percent of buying “has been from speculators,” said Threlkeld, who has traded the market for more than 40 years. “Whether they are exchange-traded fund speculators or China pig farmer speculators it doesn’t really matter, because that buying is going to come back to the market,” he said from Arizona.
Three-month copper futures on the London Metal Exchange, which surged 140 percent last year after governments spent billions of dollars to lift their economies out of recession, traded today at $6,750 a ton. China, the world’s largest user, imported a record 3.2 million tons of the refined metal in 2009, up 119 percent from the previous year.
Interest Rates
There are about 3 million tons of unreported inventories in China, said Threlkeld. The forecast for a slump to less than $1 a pound -- equivalent to $2,205 a ton -- may be driven by higher interest rates in China and the U.S., he said. The prediction reiterates an earlier call and didn’t come with a timeframe.
“Three million tons seems a bit excessive, given that that’s more than half of China’s total consumption last year,” said Li Rong, chief analyst at Great Wall Futures Co. China’s copper consumption was about 5 million tons in 2009, he said.
China’s gross domestic product accelerated to 10.7 percent in the fourth quarter, the fastest pace since 2007, adding to speculation the country may step up efforts to prevent asset bubbles. The International Monetary Fund says China’s growth will accelerate this year to 9 percent from 8.5 percent in 2009.
“The way the figures are being reported is anything that’s shipped to China is assumed to be consumed, which is clearly ridiculous,” Threlkeld said. Stockpiles monitored by the Shanghai Futures Exchange totaled 101,210 tons last week, more than three times the level a year ago.
‘Unique Situation’
“What we have now is we have a unique situation, whereby we have a surplus and production has gone up and consumption has gone down,” he said.
Output exceeded demand by 191,000 tons in the 11 months to November 2009, the World Bureau of Metal Statistics said on Jan. 20. Inventories monitored by the London Metal Exchange grew about 48 percent last year and stood at a one-year high of 543,525 tons yesterday.
“The price of copper is not just a function of how much inventory there is in the market,” said Li Junchao, an analyst at Western Mining Co.’s futures department. “While it’s true that prices last year rallied way beyond their fundamentals, we expect the market to normalize this year and $1 doesn’t quite seem feasible.”
http://www.bloomberg.com/apps/news?pid=2....
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I'm not special, and I am not likely to accomplish anything extraordinary in my life. If you are reading this comment, the case is most likely that neither will you. http://www.cracked.com/article_18544_how-the-karate-kid-ruined-modern-world.html
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Markgoldman
Posts: 1240
Incept: 2009-01-13
Canuckistan
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I've been in the scrap copper business for the last 6 years due to the nature of my employment and these current prices are like the rest of the economy, pure fantasy. Demand in my neck of the woods is down, but still in a bubble and while I don't see $1/lb I do see well under $2 by years end.
My spot price for B grade scrap is $1.85/lb currently and while I'll take it, back in the heady days of '06 I was getting $2.50 and prices are similar so it looks like the middlemen around here are gouging a bit on the margin.
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Consent Withdrawn.
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Steelpiston71
Posts: 4857
Incept: 2007-09-05
Michigan
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BOM is the ultrashort for Base Metals...
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"We have resolution authority under Frank/Dodd... How about we USE IT?" Karl Denninger, 10/07/10 on the Dylan Ratigan Show, MSNBC.
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Particenens
Posts: 9669
Incept: 2008-01-16
Peak Bund
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Steelpiston thanks for the Booommm ops BOM, added to my watch list
JJC is another one to follow, but direct releted with copper
weekly
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A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain
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Obseedian
Posts: 11872
Incept: 2007-07-26
BBRY Central
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TCK is a great short too. Just bot some puts..
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Particenens
Posts: 9669
Incept: 2008-01-16
Peak Bund
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Obs great signature  the first time Ryanair come in italy with same flight they puts this stickers on the planes.........  Copper vix ratio weekly, better holds here for the weekly close jjc target 36.55-36.65 imo
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A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain
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Lplate
Posts: 4737
Incept: 2008-08-06
Australia
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No Link Subscriber Quote:Chinese import data - January Wed 10-Feb-2010
Provisional Chinese trade data for January:
Iron ore: Imports fell by 25% from the previous month to 46.62 million tonnes. It will be interesting to see the breakdown of imports by origin later this month – we suspect that Brazil bore the brunt of the downturn because shipment data from Port Hedland (BHP) and Dampier (RIO) shows that exports from these two ports increased in December (versus November) and we would expect this to show up in the Chinese import data for January/February. We also note that severe weather conditions in China disrupted arrivals of iron ore at several key discharge ports during January.
Copper: Imports of unwrought copper and semi-finished products fell by 21% from the previous month to 292,096t. After allowing for trade in anode, alloy and products we estimate that imports of refined copper fell over 50,000t to approximately 190,000t – very similar to the November import number. |
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