copper in shanghai declines after china raises exp, page-11

re: watch bhp test 2680 hi Beijing

depends on how you view the valuation and on what prices brokers have the commodities. Current valuations by all brokers have yet to be upgraded to reflect last quarters higher than EXPECTED prices for all base metals. When they do this, it will make the diversified miners seem even cheaper.

Most commodity price inputs to all the valuation models have not even considered a sustaining of current prices let alone an increase in them. Simple supply demand mechanics and the forecast by all miners and economists will suggest that the supply side will be some time before it comes on line and even then with multiple disruptions from numerous centres (when in doubt all one needs is a funny cartoon of mohammad and we have an oil catalyst) and demand is evidently strong.

Goldmans yesterday increased the earnings guidance on both rio and bhp simply from a realisation that their base metals forecast was incorrect. Once others start to do the same we should see BHP back over 30.

Welcome any thoughts