copper price - $1.50 for 2nd half 2009, page-14

Lapdog,

Copper has intrinsic irreplaceable tangible value, the Chinese will be dominating it's consumption for decades, yet the cost of new supply will increase as grades decrease, overburden ratios increase, underground depths get greater etc. China is run by engineers, they inherently understand these issues.

Copper is too important to China imho for them to want it's price back under the control of the boom bust merchants of the finance houses. It is due for price moderation at a level that permits orderly development of new resources. China loves harmony, stability and order, and what better metal for them to start stabilising than copper. He who has the biggest inventory will be able to call the tune.

China is not going to buy at $2 in order to lose face selling it to Citi for $1.50 The world has changed, and these engineers running China are going to go for assets with tangibility and utility value, rather than the abstract assets they were never comfortable with but were conned into believing in by the Wall Street smoke and mirrors salesmen.

$2 to $2.50 looks a very good price to me for copper, maybe $3 when the global economy recovers. Forget swings from 120 to 400 and back in future imho.

EL