Commodities / Raw Materials

[Mick100]

Goldman Sach commodities index

http://www.gold-eagle.com/editorials...ann052505.html

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[Mick100]

China's Oil Import Bill Surges 86% on Record Prices (Update3)

May 26 (Bloomberg) -- China spent 86 percent more in April to import oil than a year earlier, the Customs General Administration of China said, amid record prices. Higher costs may not damp the country's demand for fuels, refiners said.

The nation's bill for oil imports climbed to $4.66 billion last month, the customs administration said in Beijing today. During the first four months of this year, costs jumped 43 percent to $13.8 billion, it said.

China, the second-largest oil consumer, imported 22.5 percent more oil in April, with shipments reaching 12.3 million tons, to meet surging demand for fuels and chemicals. High prices for oil, which touched a record $58.28 a barrel in New York on April 4, may do little to crimp the nation's consumption, said Tian Chunrong, a senior engineer at China Petroleum & Oil Corp.

``High international oil prices have an impact on our import bills, but that has a minimal effect in deterring China's strong demand,'' said Tian, whose company, known as Sinopec, is Asia's largest refiner. ``Oil imports should continue to grow in the coming months,'' he said by telephone from Beijing today.

Oil for July delivery traded at $51.23 a barrel at 5:11 p.m. Beijing time.

Imports of oil in the first four months surged 4.4 percent to 41.9 million tons, customs data show. Fuel imports in April fell 42.6 percent to 2.5 million tons and declined 14.8 percent in the first four months to 10.8 million tons.

Economic Growth

China raised the volume of crude oil imports 35 percent last year as PetroChina Co., Sinopec and other domestic producers failed to meet demand as the economy grew at the fastest pace in eight years.

The rise in oil imports indicates that China's oil companies are processing more to meet domestic fuel demand and cutting purchases of refined products from outside the country, Tian said.

Crude oil exports in April rose almost seven fold to 1.2 million tons. For the first four months, exports climbed 34.7 percent to 2.5 million tons.

Coal imports in April rose 29 percent to 1.98 million tons and by 50 percent over the first four months to 7.4 million tons. Coal exports fell 18 percent in April to 6.4 million tons and declined 3 percent over the first four months to 26.5 million tons, the customs administration said.

Power Plants

China's coal demand has risen as power plants increase generation to meet the needs of an economy that expanded 9.4 percent in the first quarter.

The government kept this year's quota for coal exports unchanged at 80 million metric tons, after cutting last year's shipments from 93 million tons in 2003.

China reduced the tax rebate it pays coal exporters to 8 percent from 11 percent, starting May 1, to encourage domestic supply and stabilize prices, the nation's Ministry of Finance said on April 29.

China's April exports of coke, a fuel used in stoves and furnaces, rose 4 percent to 1.2 million tons. Coke exports increased 48 percent to 5.2 million tons during the four months.



To contact the reporter for this story:
Loretta Ng in Hong Kong at Lng13@bloomberg.net;
Xiao Yu in Beijing at yxiao@bloomberg.net.
Last Updated: May 26, 2005 05:24 EDT

[Mick100]

SILVER STOCKS ON SALE
Sean Rakhimov
SilverStrategies.com
May 27, 2005

We learn from experience that men never learn anything from experience.
.................................................. .................................................. ..G.B.Shaw

Mining stocks are in the midst of a severe decline these days and it seems like there is no hope. The light at the end of the tunnel appears to be as dim as it’s as ever been and many think there is no light and there never was one. At least their actions assert that very outlook.

In most situations people know what they should do. They just don’t do it. We know that we need to sleep more, eat less, exercise regularly yet how many of us do it? On occasion we dab into “the right thing to do” area, but overall, we largely ignore this ageless wisdom and continue on doing what we do day in and day out. In retrospect we kick ourselves for being so hopelessly undisciplined. It happens time and again, over and over. And if that is how we behave in everyday life regarding things that are important to us, how can one expect people to be rational and do what they “should” in the stock market? After all is it not just a hobby, a kicker, something we do above and beyond our immediate needs, something that does not directly effect our present situation?

Ask anyone - what to do in the market - and chances are you will get a sound piece of advice: seek value, invest for the long term, don’t try to time the market, buy dips, don’t yield to hype on the way up or down, don’t follow the herd, buy low and sell high. Yet if you look in his/her brokerage account nine times out of ten you will see the opposite. How many of us actually do “the right thing”? How many of us follow those simple guidelines that we so easily and willingly impart to others? How many successful investors do you know? Are you one of them? This reminds me of a poker game when if in half an hour you don’t know who the dope is, you are it. Who is the dope in this resource market?

A friend phoned this morning to get my take on the markets. I actually went on to say that the only investor we commonly know is Warren Buffett (not personally, of course). Most everyone else is a trader, speculator or an outright gambler. Buffett purchased his silver in 1994 and has been sitting tight since. Do the math folks, that is 11 years! Storage fees only on 130 million ounces of silver over 11 years should amount to quite a sum. His formula is simple: find value, take a position and stay with it, not for a few weeks, months or years, but as long as necessary for the market to realize that value. That’s investing.

Incidentally, Buffett is known to say that “gold is a stupid investment because it earns no interest”, but we like gold and won’t hold it against him. After all, he is Warren Buffett, the king of value investing and we’re just die-hard silver bugs. Be as it may, actions speak loader than words. I was going to say that Buffett owns a ton of silver, but he actually owns many tons of it.

We spent two days at the NY Gold Show and report to you that our impression was that the whole show (exhibitors and attendees) was sliced in half as compared to last year or the year before. However when we talked to silver companies as we always do at these conferences, to our surprise several of them were quite happy with the public turnout and pointed out that while the quantity was on the lighter side, the quality was there. As it happens in all markets when times are good and stocks are flying high everyone wants be in the game and interest is abundant from all sorts of investors. When times are not so good – like now – interest from unsophisticated investors virtually disappears as they stage an exodus from these stocks. In contrast, sophisticated investors and others in the know, those who believe in the fundamentals of the silver story take out their check books and go shopping.

Even Bob Prechter was not able to scare off investors with his keynote presentation discussing the end of “bear market rally” in gold and

[Mick100]

Shanghai Copper Futures Rise on Declining London Stockpiles

June 3 (Bloomberg) -- Shanghai copper futures rose for the third day after stockpiles in London fell to a 17-year low, adding to concern that global supply may lag demand from cable and wire makers in China and the U.S., the world's biggest users.

Stockpiles in warehouses monitored by the London Metal Exchange fell 67 percent in the past year to 43,225 metric tons, the lowest since May 1988. Inventories monitored by London, Shanghai and New York totaled 91,078 tons yesterday, less than two days of global consumption, based on Macquarie Bank Ltd.'s forecast of 17.37 million tons.

``The main reason for rising prices is the problem of stockpiles, which are just over 90,000 tons, while producers and traders are adding to inventories,'' Fang Xiangming, a metal analyst at Zhongcai Futures Co., said by telephone from Shanghai.

Copper for August delivery on the Shanghai Futures Exchange rose as much as 950 yuan, or 3.1 percent, to 31,350 yuan ($3,788) a ton. It traded 810 yuan higher at 31,210 yuan at 9:53 a.m. local time.

Copper for delivery in three months on the London Metal Exchange was bid at $3,173 and offered at $3,178 a ton at 9:53 a.m. Shanghai time from $3,179 yesterday.

On the New York Mercantile Exchange, copper for delivery in July on the Comex division fell 0.25 cent, or 0.2 percent, to $1.5140 in after-hours trade at 9:55 a.m. Shanghai time. The contract closed at $1.5165 a pound yesterday, the highest closing price for a most-active contract since April 11.



To contact the reporter for this story:
Chia-Peck Wong in Singapore at cpwong@bloomberg.net.

[Mick100]

Bloomberg News

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IEA Raises 2nd-Half Demand Forecast, Straining OPEC (Update2)
June 10 (Bloomberg) -- The International Energy Agency, an adviser to 26 countries, raised its forecast for oil demand in the second half, signaling greater strains on OPEC's capacity to ensure supplies as consumption peaks in the fourth quarter.

Global demand will reach 86.4 million barrels a day in the fourth quarter, the IEA said in monthly report today, up 200,000 barrels a day from its prediction one month ago. That means the Organization of Petroleum Exporting Countries will need to pump 29.6 million barrels a day in the final quarter, 300,000 a day more than expected last month, the IEA said.

OPEC members ``are producing at close to capacity,'' Jeff Brown, the IEA's oil demand analyst, said in an interview from Paris. ``Hopefully by the end of the year the pressures that we see will ease.''

Oil futures remain above $50 a barrel as OPEC nations increase output to build inventories to ensure supplies are ample for use later this year. Traders are concerned about tighter supply during the Northern Hemisphere's winter months, when heating fuel consumption will peak, and constraints in oil- refining systems.

Brent crude oil futures for July settlement gained in London after the IEA report, and were up 26 cents at $54.08 a barrel at 10:05 a.m. New York oil was up 32 cents at $54.60.

The IEA left its full-year 2005 demand projection unchanged at 84.3 million barrels a day, as it raised both its third- and fourth-quarter estimates by 200,000 barrels a day and lowered the second quarter by 200,000 barrels a day. The IEA had raised its 2005 world demand estimate in four of its previous five monthly reports.

OPEC Capacity

The world's oil use will grow by 1.78 million barrels a day, or 2.2 percent, in 2005, which is slower than the 3.4 percent increase last year, which was the fastest in a quarter century. The agency will give its first forecast of 2006 demand next month.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, decreased crude oil production by 55,000 barrels a day last month to 29.3 million barrels a day, amid lower output from the United Arab Emirates and Venezuela, the IEA estimated. Venezuelan crude production fell 40,000 barrels a day to 2.12 million barrels.

OPEC capacity at the end of the year will be 32.2 million barrels a day, the IEA said. About 700,000 to 800,000 barrels of daily capacity is still to be added to the OPEC system in the rest of the year, the IEA said.

``OPEC is pretty much producing at capacity,'' said Veronica Smart, an analyst at the Energy Information Centre, a consulting company in Newmarket, England.

``The Saudis have some spare capacity but that's sour crude and nobody really wants much of that'' because it's more difficult to refine, she said. ``The focus in the oil market is already on winter, and prices seem reluctant to fall.''

Some Oil Coming

The IEA said non-OPEC nations will help to boost supply.

``Potentially the market could ease a little bit later in the year, as there is more non-OPEC production coming online,'' the IEA's Brown said.

The combined crude-production quota for all OPEC members except Iraq was raised to 27.5 million barrels a day at an OPEC meeting in March, and members are considering whether to raise quotas further when they meet next week in Vienna on June 15. Actual crude production from those 10 nations was 27.51 million barrels a day in May, according to the IEA.

``A tacit acceptance remains in place within OPEC of the need to build inventories ahead of rising second-half demand,'' the report said.

Industry oil stockpiles in Organization for Economic Cooperation and Development nations rose by 13.5 million barrels in April and were 99 million barrels higher than a year earlier. They were equal to 53 days worth of demand, unchanged from the pervious month's report, the agency said.



To contact the reporter on

[tricha]

Tight supply to extend copper's bull run

Fri June 10, 2005 6:06 PM GMT-04:00
By Robin Paxton

NEW YORK (Reuters) - High copper prices will extend into 2006, possibly hitting new records, but Chinese demand alone will not be enough to sustain the bull run in the industrial metal, a top industry analyst said on Friday.

Edward Meir, commodity analyst for Man Financial in New York, said the world would consume more copper than it produces in the third quarter of 2005 and the first two quarters of 2006, but there would be a surplus in this year's fourth quarter.

"Demand has been steady, but supply hasn't been keeping up," Meir told Reuters in an interview. He forecast an average copper price of $3,200 a ton this year for three-month delivery on the London Metal Exchange.

Next year, he said the average price would be $3,100. Consumption in China, which uses about a fifth of the world's copper for everything from electrical wires to air conditioning units, helped drive the price of the metal to a record high of $3,336 a ton in April.

China's demand is seen growing this year in excess of 9 percent, in line with forecast economic growth, but Meir said U.S. and European growth would also underpin copper prices.

"Most people are a little bit starry-eyed on China," he said. "When you're running a huge trade surplus like China is, you are dependent on other markets being strong enough to sustain your own growth."

Meir said the recent strength in prices was linked more to tight supply and London Metal Exchange warehouse stocks that have dwindled to their lowest levels in more than 30 years.

The end of a current round of interest rate hikes in the United States and a stronger U.S. economy from the second quarter of next year would also help copper prices, he said.

COPPER DEFICIT Meir forecast a global deficit of 11,000 tons of copper in the third quarter 2005, a surplus of 92,000 tons in the fourth quarter, and deficits of 7,000 tons and 37,000 tons, respectively, in the first two quarters of 2006.

"You're still getting supply shortages here and there, and demand is still strong enough to take in whatever extra production is coming in," he said.

There were few hidden stocks waiting to come into the market, he added.

"When you have a backwardation of $200 for three months, every pound of it is either used or pledged. I don't think anyone's sitting on hidden stocks," he said.

Backwardation occurs when the cash price exceeds the price for delivery at a future date.

But Meir said he had heard rumors that 10,000 tons of copper might arrive in LME warehouses within the next week, which would set back prices.

Of other metals traded on the LME, zinc had the most potential to rise further, Meir said.

"Zinc is a bit of a laggard. It's due to move higher," he said, predicting a deficit of the anti-corrosive metal for all of next year. Meir forecast an average three-month LME zinc price of $1,285 ton this year, rising to $1,350 a ton in 2006. The metal hit $1,450 on March 16, its highest since September 1997. On nickel, he forecast an average three-month price of $15,200 a ton this year and $14,700 in 2006.

Nickel is used to add strength and sheen to stainless steel. Demand for the metal is soaring in China, but Meir said it could be curtailed by any slowdown in Chinese stainless steel output.

[tricha]

In my opinion, Why oil is King - but soon to be displaced by Uranium, simple isn't it! Cheers[B)][}]

P.S And why BHP stole WMC for a song! Uranium!
Is global oil production reaching a peak?
A few years ago only a handful of geologists and academics were considering such a possibility.

But now it appears even governments are taking a serious look at the subject.

The question is occupying more and more minds around the world.

It could happen soon.

A French government report on the global oil industry forecasts a possible peak in world production as early as 2013.

Don't mention it

The report 'The Oil Industry 2004' takes a long look at future production and supply issues.

But perhaps what is most interesting about this Economics, Industry & Finance Ministry report, is that it actually mentions a possible production plateau at all.

Even one year ago it was unheard of to find the subject mentioned amongst government ministries or financial institutions.

Now banks such as Goldman Sachs, Caisse D'Epargne/Ixis, Simmons International and the Bank of Montreal have all broached the subject.

"They are being forced to by circumstances," says Professor Richard Heinberg, author of 'peak oil' books Power Down and The Party's Over.

"They have relied on optimistic data and rosy outlooks that are being proven to be incorrect."

Nevertheless, some analysts disagree with the notion of any peak in oil production, also known as 'Hubberts curve', after the geologist M King Hubbert who first argued the case.

Deborah White, senior energy analyst at Societe Generale in Paris, says that "we have heard these arguments about 'peak oil' since the idea of Hubert's curve came into being.

"We don't endorse the idea at all."

'Peak oil' mentioned

And yet, the French report, perhaps the most open government dossier yet, questions the viability of long term oil production.

The report's second chapter 'Global Exploration and Production' runs a series of differing scenarios based on current forecasts.


Commuting from cities to the suburbs raises the odds

The scenarios differ according to projected demand increases, from 0% to 3% per annum, and possible new field discoveries, between zero and fifty billion barrels a year.

At a rate of 3% increase in demand per year and annual finds of 10 billion barrels, the ministry report states 2013 as "the time of maximum production or 'peak oil'".

That would mean the world's oil consumption would reach its highest point at around 97 million barrels per day (mbpd).

Forced to react

It is also very unusual to find a government report using the wording 'peak oil'. This is a phrase often used to describe the theory of a global oil production plateau, after which production would begin to decline.

Chris Sanders spoke at the recent Association for the Study of Peak Oil conference and is director of international finance consultants Sanders Research.

He believes 'peak oil' is major threat to modern economies.

"There is only so long politicians can ignore a geological problem, and it is a geological one," he says.

"Governments have had a great chance to take the lead on this situation, but they have not taken it. Now they are being forced to react.

"Why? Because it is very probable that we are nearing 'peak oil'."

The French report uses the phrase, in English, and repeats it on no less than four occasions.

Outdated data

The best case scenario the report lays out is rather far fetched, with a 0% increase in world consumption, at only 79mbpd, with annual finds of 50 billion barrels of new deposits per year.

That makes 'peak oil' arrive in 2125.


Supplying the world with oil is getting trickier by the day

Unfortunately the report's figures are already outdated. The world consumed 84.7 mbpd in the first quarter of 2005.

International Energy Agency (IEA) forecasts - traditionally regarded as conservative by the markets - p

[Mick100]

Copper reaches record high

Funds move back into metals as supply tightens. Powerful quake in Chile heightens supply fears.
June 16, 2005: 3:50 PM EDT

LONDON (Reuters) - Copper prices touched record highs above $3,340 a ton Thursday as fund managers shifted back into metals markets dominated by tight supply.

Analysts said supply worries and shortages of material on the London Metal Exchange (LME), the world's largest non-ferrous metals market, cemented gains.

"Having set up new highs a period of consolidation would not be surprising," Basemetals.com's William Adams said.


"There's a chance to go higher above $3,350 after a brief period of consolidation, profit-taking and producer selling.

"However, from mid-July onwards there will be seasonal shutdowns for maintenance and with production increases due later this year we should see prices then ease."

Numis Securities analyst John Meyer said in a report: "Cash copper prices are perilously close to a staggering $3,550 a ton as (economic) data out of China supports our view of continuing strong manufacturing growth in the region.

"The market is awaiting the release of Shanghai (metals) inventory data on Friday to measure the impact of recent strong industrial activity."

A trader said: "Copper is onwards and upwards -- the market has been running short and they (shorts) have been caught on the wrong foot."

LME three-months prices closed at $3,317 after touching $3,343 at midday, but were still well up from Thursday's close of $3,287.

"Stops were triggered above $3,330/40 in copper and after this some profit-taking has weighed in, partly prompted by a reversal higher in the dollar," one LME broker said.

The dollar bounced higher in volatile, technically driven trade, recovering from an earlier dip on slightly soft U.S. data as questions about political integration in Europe took a toll on the euro.

In New York, COMEX July copper futures rallied to a new 16-year high on renewed fund buying.

Supply premium
The premium commanded by prompt delivery copper over three months delivery was at an 8-1/2-year high of $240 in London, with LME warehouse stocks of the metal falling 1,000 tons to 38,300 tons -- a level last seen in July 1974.

Total world stocks, held by producers, consumers, merchants and all market warehouses, are some 670,000 tons, equivalent to less than three weeks of demand.

At the start of 2004 world copper inventories were 1.5 million tons.

The LME spot premium echoed that scarcity of nearby supply. Typically the cash price is at a discount to reflect the cost of storing and financing metal for forward delivery.

"The real bottleneck is in readily available smelting capacity, which has restricted the availability of LME grade copper," Meyer said.

"While there remains some under-utilized smelting capacity in the world, much of this spare capacity is in relatively inaccessible locations."

Tokyo traders said fund managers might be reshuffling their portfolios after recent rises in long-term U.S. bond yields and only modest gains by Wall Street stocks.

The LME, along with precious metals and energy markets, posted strong price gains on Wednesday on the view that funds were shifting back into raw materials, traders said.

Supply fears
A powerful earthquake this week in the northern mining region of Chile, the world's leading copper exporter, had intensified worries about market supply.

Traders were particularly concerned by the closure of BHP Billiton Ltd.'s 115,000 tons a year Cerro Colorado copper mine in Chile, which remained shut overnight.

They are also mindful of the threat of labor action hanging over copper miner Asarco in the United States.

But BHP's giant Escondida Chilean mine was operating normally.

BHP Billiton and a buoyant mining sector led a bounce by Britain's top shares on Thursday on the back of strong Chinese industrial data, high base metals prices and positive analyst comments.

Aluminum prices shrugged off news that Norway's Norsk Hydro

[Mick100]

THE "REAL" BOOM!

Puru Saxena
26 June 2005


Let us assume that an investor is looking for one asset, which he could buy and hold for the coming 10 years. This individual is extremely busy with his work so he does not have the time to closely monitor his investments on a regular basis. He is simply looking for an undervalued asset-class, which he could buy and forget for a decade without any sleepless nights. His plan is to invest his money in only one asset-class and he intends to cash in on the profits in 2015. So, which asset-class should this guy invest in? Should he buy US stocks, Asian stocks, perhaps bonds or even leave his funds in cash? Below, I provide my analysis of what he ought to be doing with his money.

But first, I want to start with an underlying philosophy. As an avid student of economic history, I have realised that all assets go through multi-year economic cycles commonly known as bull-markets (boom) and bear-markets (busts). These cycles surely follow each other as night follows the day. During a bull-market, an asset goes from depths of undervaluation to overvaluation. A bull-market usually ends with intense public participation, optimism and euphoria. On the other hand, a bear-market takes an asset on its long journey from extreme overvaluation to acute undervaluation. A bear-market usually ends with "blood on the street" or deep, dark despair. As a money manager, it is my job to identify, which assets are in a bull-market and those that are in a bear phase.

Looking back at history, it is now easy to see that if the above investor had to buy one asset in 1970 for the next 10 years, he should have bought commodities. For those who are not familiar, commodities went through an enormous boom during this period. Supply conditions were extremely tight, demand was rising and we also had the "Oil Shocks", which led oil to its all time high in 1980. During that period, the US economy was in a recession, inflation fears were running high and interest-rates were rising fast. The whole world was convinced that inflation would continue to escalate and that savings would eventually become worthless. Thus, everyone turned to hard, tangible assets to protect their wealth. The boom, which started off as a gradual bull-market (as they all do) erupted into an enormous mania in the late 70's as investors kept piling their cash in commodities whilst completely ignoring the prices they were paying. During the 70's, several commodities went up through the roof. Sugar went from 1.4 cents/pound in 1966 to 66 cents/pound in 1974 - a staggering rise of 45 times! Oil went from $2/barrel in 1973 to over $30 in 1980 and gold went from $35/ounce in 1971 to over $850/ounce in January 1980! Looking at the statistics now, commodities were an obvious choice in the 1970's but hindsight is always 20/20.

If our investor friend was looking for one investment theme in 1980 for the next 10 years, he should have bought Japanese stocks and real-estate. During that period, Japanese assets soared exponentially as the world became amazed by the "Japanese miracle". Money kept pouring in from around the world and the Japanese stock-market index (NIKKEI) rose from 6,500 in 1980 to 38,915 in December 1989. The future looked obvious: Japan's hardworking and focused society seemed unstoppable. In the 1980's, the Japanese economy was a sensation - the most dynamic economy the world had ever seen. Meanwhile, Japanese real-estate also surged. At the peak of the bubble in 1990, Japanese real-estate was worth four times the value of all property in the US! The Imperial Palace in Tokyo and the nearby park were valued more than the whole of Canada! So, it is obvious now that the land of the rising sun would have been the best option for investment purposes in 1980.

Let us now turn to the next decade - the roaring 1990's. During that period, our investor should have put all his money in American assets. During that period, the world's super-power came alive as the world fell in love with the US. As many will remember, the last decade s

[Packersoldkidney]

Is 'Puru' their real name? Sounds like the alias of some bird on the phone sex line. Not that I'm into that sort of thing (ahem), just knew a few girlies at uni who used to have the odd alias as they were putting themselves through education by having some 'extra-curricular' money making ventures.

Not that I ever heard they also had an alias as an economic commentator: gawd! At uni, being a phone sex worker has more cred than being an economist!

Sorry Skinny! And the other economists hereabouts.