copper up, page-4

K

Can't prove it and can't back it up but in my mind there are a lot of smoke and mirrors at play.

Yes the AUD is rallying but how long will that last - If anything the RBA has incentive to keep the AUD low whereas the US has incentive to keep the USD high - who will win - well in my mind we dont have a fight - US wants their high - we want ours low = so they will do what they need to do what they need - USD should be down - it should be smashed - but in the medium term I think lots will be done to avoid that.

As to metal prices - Just ask yourself if you were a Chinaman relying on imported metals - and the prices attached to them - would you not do all you could (or expect your govenrment to do all poss) to get prices lower?

During the shut down for the olympics would you not stock up sufficient supplies to be able to create an impression that your demand for those highly priced metals has waned and thus create a platform from which you can demand lower prices.

Pretty easy to do I suspect - you know everything is shutting down for the olympics around the same time Nth America is on summer hols - so you slow imports down - you dont stop them - you just slow them down - bit by bit and pile it all up on the wharf -

Slow them enough and you can even make the BDI fall too

Nevertheless - you keep the imports comming but at a lesser rate.

I Recall reading ages ago that in a normal environment there is just 4 or 5 days of copper at the call in warehouses for the LME.

Four or five days supply - a week maybe - so if production ceased the warehouses would be empty within a week.

Pretty damned hard to renegotiate prices when there is at best a weeks supply of copper in worldwide warehouses dont you think

So China shut down for 2 - 3 months didnt they - OK Nrth America only shut down for a month summer hols but imagine the stock piles you could accumulate over that time - if you wanted to create the impression of lower demand -

Feed ya plan out to the hedge funds so they can play the game too - they pump the media with resource bubble has burst while they short copper contracts and then move on to short the resource stox - people argue saying the resource boom isnt finished - they say look at the warehouse stockpiles and metal prices - of course its finished - and everyone bails out of resource stox!

By now, if you were a Chinaman you'd be in good stead to renegotiate prices hey. Be in even better stead if you rang a few companies up and said - can you hold off on the next shipment - we are reducing production so wont need as much from now on. OOOH forgot to tell you part of that reason is we have shatloads sitting on the dock because we kept bringing in smaller volumes during the shut down period - but I forgot to mention that.

Yes China will slow down - a bit. They go from a sprint to a run lol

But it is still there - still building - ok at a slower rate and maybe we will have 5 or 6 days supply in warehouses instead of four - but then again - how many copper mines are comming to end of life - how many wont get the go ahead to replace them - Where did I read just the other day - in reference to copper - all the low hanging fruit has been picked - its gone - we only have the hard to get stuff left.

In summary - US wants the USD up - Oz wants the AUD down -

China may slow - but contrary to what some may prefer us to think shorter term - it is still there and growing.

Heard lots of noise concerning China including it dring up - slowing down - evaporating etc etc etc - but the one very clear thing I can hear above all else - THEY WANT CHEAPER PRICES - whether it be iron ore - copper nickle etc etc - they dont want to pay as much.

FMG is trying to play that line atm positioning itself as an alternative RIO and BHP prices.

Anyway waffeling on too much now - probably have waffeld on too much already - been to the pub and had a few blacks - now had half a bottle of sherry and gottsa get to bed

Hope it makes some sense
cya