resource potential

We're all notice base metal and BHP have come off a bit in the last few trading days, this is no doubt are dued to profit taking and the strong $US which drive the base metal price down. I believe the base metal price recent drop is only a short term as the shortage of most base metal are expected to be for atleast in the next 2 years. With the China and India economies going strong, we're now also got the Japan and US economies picking up stream as well and it won't be long before Europe economies follow.

The pick up in the world economies will create commodity boom and with supplies shortage the base metal prices could see more new high. Almost every day, I see copper and other metals supplies are down and new mine and production is not for another 12 months away. Last night, both BHP and RIO managements have come out stating the continue and expect strong demand from China and other countries to come and with oil price spiking over 3.5% last night with more demand to come, BHP is a better stock to hold than RIO.

Of course, we all heard China economy is looking to slow down this year but if other countries economies pick up and require more manufacturing from China, it will creates more wealth and spending for the Chinese. So, you try and slow down the economy, especially if every household in China decide to buy a fridge or washing machine.

Good luck.

Found this article on Bloomberg.

BHP's Goodyear Seeing `Strong' Steel Demand in China (Update4) Listen
April 8 (Bloomberg) -- BHP Billiton Chief Executive Chip Goodyear said rising demand from automakers and builders in China is bolstering shipments of copper and steelmaking materials from the world's biggest mining company.

Goodyear, who is visiting Tokyo this week, said Melbourne- based BHP Billiton's Japanese customers are focused on China and are expecting a pickup in their local market. ``My visits with them have been quite upbeat,'' he said in an interview.

BHP Billiton doubled second-quarter profit as China, the world's largest steel producer and importer, increased steel, aluminum and copper purchases, causing prices to surge. In the past two months, Goodyear has approved projects totaling $2.4 billion to expand copper, nickel and iron ore production.

``Those commodities are probably the strongest,'' Goodyear said. ``We are certainly seeing strong demand for steel in China, driven very much by infrastructure development and auto manufacturing.''

Shares of BHP Billiton ended trading down 8 cents, or 0.6 percent, at A$12.35 on the Australian Stock Exchange. They have gained 29 percent in the past year.

China's government forecasts the economy will grow at least 9 percent in the first half. The Japanese economy grew at a 6.4 percent annual rate in the fourth quarter, the fastest pace since 1990.

`Higher Prices'

Rio Tinto Group, the world's third-biggest mining company, said yesterday economic recovery in the U.S. and other developed countries, and growth in China, will boost metals demand this year.

``Improving global economic conditions will mean robust demand for metals and minerals and higher prices from which we can expect to benefit,'' Chairman Paul Skinner told investors at Rio Tinto's annual meeting in London.

Copper prices have surged 79 percent in the past year and nickel has climbed 74 percent. Iron ore prices for the year that began on April 1 will increase by 19 percent and BHP Billiton has said it will get an average of 28 percent more for its coking coal during the same 12-month period.

``Coking coal is a commodity that currently is under a lot of pressure in terms of demand,'' Goodyear said. ``There have been a number of incidents around the world that have restricted supply. It's probably tighter than iron ore and iron ore is certainly'' in tight supply.

Mitsubishi

BHP Billiton is investigating ways it can expand annual production at BMA Coal, its coking coal venture with Mitsubishi Corp. in Australia's Queensland state. This coal is the type burned by steelmakers in blast furnaces. BMA, which ships more than a quarter of the world's trade in coking coal, is currently producing at an annual rate of 54 million tons, about 4 million tons above its nameplate, or initial design capacity.

``We're looking at opportunities to expand that, but to do so you need to expand the mine, the rail and the port,'' Goodyear said. ``We certainly have investment opportunities available'' to expand.

BHP Billiton owns one-sixth of the Woodside Petroleum Ltd.- led North West Shelf venture off northwestern Australia, which in 2002 agreed to sell about 3.3 million tons a year of gas to China's first liquefied natural gas import terminal, at Guangdong, in a deal worth about A$25 billion. The volumes may be increased to 3.7 million tons a year, Woodside said last October. Phil Aiken, BHP Billiton's group president, energy, visited Guangdong last week to continue talks to complete the sale contract.

Mergers

``We currently have our existing contract and there is certainly discussion about whether that would increase,'' Goodyear said. He said talks are underway with buyers to determine the final volumes of the fuel to be supplied by the venture to Guangdong.

BHP Billiton was formed in 2001 after Australia's BHP Ltd. combined with London-based Billiton Plc. Opportunities for growth from mergers and acquisitions is ``difficult,'' Goodyear said. ``In this market, it is quite difficult to find good value given the way that resource stocks have appreciated, certainly over the last year.''