commodity bull over, page-7

I think people need to look at something besides a chart and to look at the world on a longterm view.

Even if oil "crashes" to $100 a barrel, BHP's cost of production is $5-7 a barrel. They have a platform in the gulf of mexico producing 200,000 bopd. So close to $20 mill profit/day from a producing oil platform. Not too bad... And then they have other projects in the oil area producing big $ profits everyday. Oil and gas etc. is ~20% of BHP's cash flow. Then add upside to that at any price over $100/bbl

If copper "crashes" to $2.50/lb, doesn't matter, Escondida and other low cost copper projects are still producing a $hite load of profits everyday.

What does everyone think will happen to the medium term Cu price when Escondida (the worlds largest Cu mine, produces ~10% of world consumption) will be producing 10-15% less next year?

A fun fact:-
China and other countries are building alot of electric high speed railways in the next decade, railways that are upto 430 km/h. So at this speed Brisbane to gold coast takes ~8 min. anyway...electric trains run off overhead electric cables...trains upto 200 km/h require a 120 mm Cu cable, trains over 200 km/h require a 240 mm Cu cable for 1000s of km. Fact: that is a lot of Cu.

There's a big bonus for BHP with any of their copper sulphide containing deposits...electrowin Cu conc. to get 1 ton of Cu you also get 3 tons of sulphuric acid. Has anyone seen sulphuric acid prices latelty? It is expensive.

Anyway there are many, many other examples of strong demand for commodities. Why have asian customers for bulk commodities for longterm contracts agreed to massive price increases if they don't need it? IO, met. coal, thermal coal etc. they obviously need it and are willing to pay for it.

A cheaper oil price and slightly softer commodities prices is actually better for long term plays. You don't want the world to try and sprint a marathon, you want it too slow down a little and to run stronger for longer.

I am a longterm investor and couldn't care less about what your chart says.

choice