LAST Friday's question as to whether the resource market conditions could get any better has been answered with a resounding roar. Investors couldn't get enough of the sector as precious and base metals beat long-standing records, and in the case of zinc and copper, all-time highs.
TABLE: Buy, buy, buy
While comments from an LME trader highlighting the possibility of base metal bellwether copper reaching $US7000 per tonne suggest a peak is clearly in sight – and possibly fairies at the bottom of the garden – the question of timing is paramount.
The unnamed (surprise, surprise) LME trader told Reuters that he wouldn't be selling the metal down despite conceding he didn't think the price "deserves" to be at such levels from a fundamental perspective.
The wire also quoted ABN Amro highlighting the absence of physical buyers.
"The face of the market has changed and is populated by some participants who ... are not afraid to pay new highs and have little regard for whether the price is justified by the fundamentals or not," an ABN Amro research note said.
"They were told the price was unsustainable at $3000 and did not care then. Even at these heights, the warnings about overvalued base metals still fall on deaf ears."
Another market player quoted by Reuters said: "Copper is approaching a bubble market where there are no rules."
Zinc closed on the LME at an all-time high as inventories continued to dwindle, while gold and silver were at more than two-decade highs.
