the ebb and flow of the markets as people seek to lock in profits
producers and consumers normally set prices - but in copper for example one cannot deny the role of speculators (on the long and the short side!!!)
so in the short term no-one can predict prices
in the long term prices will be set by the eagerness of the sellers to sell and the buyers to buy at each price level
how much this has to do with cost of production, perceived scarcity, ability to pay will be determined by the invisible hand of the market
the god news is that demand and supply have been unresponsive to price - so given the emergence of china and india and synchronised growth globally i expect prices to remain "high" and "stronger for longer" but this does not mean prices will not be volatile at times nor that copper will trade at $4/lb all day every day
what it means is that investments in reasonable cost producers will do better for investors more of the time as opposed to the corollary of this (worse for more of the time!!!) - don't forget the inability/unwillingness of the majors to up production and the use of low price assumptions in due diligence
THE PARADOX IS THAT THIS PRICE WEAKNESS HAS THE IMPACT OF DELAYING/DISCOURAGING SUPPLY EXPANSION HENCE PRICES ARE SUPPORTED AT "HGHER LEVELS"
