fundamentals aligning, page-3

http://www.reuters.com/article/2012/08/26/noble-basemetals-expansion-idUSL2E8JHMDE20120826?feedType=RSS&feedName=rbssEnergyNews&rpc=43

Interesting article on Noble the commodities trader moving into copper etc. Looking for off take deals etc.

"...SOUTH AMERICA FOCUS

The search for base metals will likely focus on major producing regions such as South America, a source familiar with the matter said.

Noble already has an array of iron ore and coal offtake deals and strength in alumina and aluminum through tolling deals. Last December, it signed a pact to supply a smelter in Azerbijan with alumina in return for aluminum output.

It is also one of the few merchants still doing business in Venezuela, where the aluminum industry is in crisis.

In 2010, it bought a small U.S. warehousing firm, Delivery Network International LLC, which has expanded to 10 LME warehouses, including in Singapore and the Netherlands. But that is small compared with its rivals, which have vast global storage facilities.

JP Morgan Chase & Co's Henry Bath unit operates in 17 cities from Rotterdam to Johor, while Metro, owned by Goldman Sachs, has 14 locations, with its Detroit headquarters storing a quarter of LME-registered aluminum stock.

And it may be hard to wrest mine supplies away from the big traders. Glencore controls half the world's copper supplies and 60 percent that of zinc through lucrative off-take deals, marketing arrangements with Xstrata Plc, in which it owns a 34-percent stake, and stakes in smelters.

But Noble hopes to find opportunities by funding new projects similar to its niche in the Indian iron ore market.

With weak LME prices potentially preventing projects from getting off the ground, junior miners may seek help from traders. Aluminum, zinc and nickel prices are close to break even for many producers.

Merchants often provide funding for start-ups in return for a minority stake and output once the mine is operating.

"Trafigura (and Glencore) were early movers with a good franchise. But there's still plenty of room at the table. Juniors are hurting at these levels and (Noble) will be happy to help out," said the source familiar with the matter."