don't miss the good ride, page-11

Looked okay today - and the close of 4.87 was cloe to the intraday highy of 4.88. Still volatile but I still can't note any accumulation of sorts.

A warning below (07/04/13):

Copper production is rising at the fastest rate in a decade, prompting investors to bet on a price collapse.

The price of copper is key to the profitability of the large mining companies such as BHP Billiton, Anglo American and Freeport McMoran, as well as for the economy of Chile, which derives more than one eighth of its GDP from the metal, and other countries such as Mongolia and Zambia.

The inability of the world’s copper miners to boost production in response to soaring Chinese demand has been a key driver of the “super-cycle”of high prices and bumper profits for the mining industry over the past decade.

But that trend has recently reversed, as miners’ investments in new supply begin to bear fruit. Copper output in Chile, which accounts for a third of global supply, has been rising strongly in recent months, boosted by the expansion of Escondida, the world’s largest copper mine. Wood Mackenzie, a leading consultancy, expects 2013 to see the biggest percentage increase in global mine production since 2004.

Copper prices last week fell to an eight-month low of $7,331 a tonne on the London Metal Exchange. The price of the metal, used in everything from electrical wiring to air-conditioning units, is down 28 per cent from a record high in 2011. Nonetheless, almost all copper mines remain profitable at current prices, leading some to argue that prices could fall further.

“A lot of the funds are beginning to see this situation where you’ve got a lot of supply finally coming through and demand is not looking that great,” said Richard Wilson, chairman of metals at Wood Mackenzie.

The increase in copper supply will be the focus of Cesco week, the major annual gathering of the copper industry in Chile, which begins on Monday.

It has helped to trigger a sharp increase in copper inventory, with stocks of copper at LME warehouses almost tripling since October.

That has made many investors bearish: according to data on US contracts from the Commodity Futures Trading Commission, investor positioning is the most bearish since 2009.

Barclays, traditionally one of the most bullish banks on commodity prices, said that the rise in supply marked the “end of an era for the copper bulls”.

Even so, traders believe the market may have become over-pessimistic in the short term as Chinese consumers, who account for 40 per cent of global copper demand, have become more optimistic in recent weeks.

Stocks in warehouses around Shanghai – closely-watched by the market as an indicator of China’s need for copper – have fallen by some 50,000-100,000 tonnes in recent weeks, traders say.

http://www.ft.com/cms/s/0/012b64b0-9f9f-11e2-968b-00144feabdc0.html#axzz2Pr8zGPuS