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WH, I expect this bull market in resources to last for another 10 yrs. Each of the base metals will have their day in the sun over the next 10 yrs. Copper, coking coal and iron ore are the frontrunners at the moment but it's unlikely that they will still be in front in 10 yrs time
One has to keep an eye on the supply demand equation for each individual metals as we move through this bull market. Each will have their own minnie bull market within the resouces bull market. As prices increase, supply will be ramped up and deficits in supply will be replaced by surpluses. Prices will then level off and start falling.
Mick
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Mick100
Yes , one needs to be out before supply is ramped up to meet or exceed demand and one has to be continuously vigilant to assess when this situation is nearing
I have come to the conclusion that you and I are pretty much on the same wave length on such matters
With copper I believe that supply will not outstrip demand for some time , maybe for five or ten years
Stocks are nearing critical levels and if a situation is reached where there is simply not enough stock to satisfy demand then anything could happen
One point that I failed to make above is that with the advance of technology it is now possible to provide high speed internet connections over copper cables
This must result in copper cables being preferred over fibre optics in many cases and hence a further demand on copper
I had initially thought that fibre optics would largely take over from copper cabling , but this would not now seem to be the case
The rules of supply and demand are very strong ; they pretty much rule metal prices , with the exception of silver for the time being maybe , but I am sure that at the end of the day the laws of supply and demand will win with silver also , even if it takes another two or three years
There is something really tricky going on with silver at present in my opinion --- some form of price rigging , short selling etc
I am just waiting for the day when it can no longer be sustained and that those that are involved are bitten in the bum
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Whiteherron why would copper be preffered for High speed internet When F/O is faster and allso better for phone calls.
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SPEAKING FREELY
Why oil prices are barreling up
By Andrew McKillop
Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.
LONDON - In the past week, oil prices have regained about US$3 a barrel after hitting a low of $45. Apart from the perennial US weather factor, positive sentiment was reinforced by IEA (International Energy Agency) data revising previous forecasts for world oil demand growth in 2005 by 80,000 barrels per day, or 0.08 million barrels/day (mbd), to the suspiciously modest figure of 1.52 mbd.
This is hard to fathom because the IEA also raised its final estimate of world demand growth in 2004 to 2.68 mbd. In percentage terms, growth in 2004 was very close to 4%, the highest for over 25 years. This number conflicts with forward planning ideas and beliefs of the IEA and other energy players - especially the world's 10 biggest oil corporations. None of these players plan for demand growth beyond 1.75% per year. Some, such as BP and ENI, still claim that the "normal" long-term growth is about 1.3% per year.
On the consumer side, to back the notion of slow growth being a fixed paradigm, oil users are everywhere thought to show "price elastic" response to higher prices. That is, they cut their consumption as prices rise. On the supply side, the same high prices are expected to bring new and big suppliers into the market. If this does not happen, we have an oil crisis. This pre-crisis context is directly reflected in the market by rising volatility on a longer-term upward price profile. The IEA forecast of growth in 2005 dropping about 42% against 2004 is, we can surmise, purely wishful thinking.
The Organization of Petroleum Exporting Countries (OPEC) is usually wheeled into the pricing melee by saying it will now "defend" $40/barrel, after waiting until December 2004 to say it was no longer "defending" a price range of $22-28/barrel. But the question is: what spare capacity does OPEC really have? This raises the key question as to what exactly OPEC's current 11 members (OPEC-11) produce and export. Using data from the Oil & Gas Journal on world daily average production in 2004 and 2003, only Iran, Qatar, Kuwait and Saudi Arabia are credited with production hikes of over 3% in 2004, excluding the very special case of Iraq. For Oil & Gas Journal, there was a 55% increase in Iraq's daily average production to about 2.05 mbd in 2004, while EIA (Energy Information Administration) and the DoE (Department of Energy) figures give about 1.55 mbd, almost identical to the 2003 average output. BP places Iraq's 2003 production at a daily average of 1.33 mbd. This is exactly half the growth in world daily average oil demand in January-December 2004.
Any production numbers for OPEC are subject to the key question: net or gross? Iraq, for example, has soon recovered pre-war domestic oil demand of about 0.65 mbd despite shattered economic infrastructure and 60% unemployment. US occupation forces in Iraq are credited with about 0.35 mbd demand. During the economic reconstruction phase that may now be about to start, Iraq's domestic demand will certainly increase rapidly. Normal economic development in oil producer countries is of course oriented to energy-intensive activities. Saudi Arabia's domestic oil demand in 2004, according to BP, increased by 5.5%, much more than its 3.2% hike in daily average oil production. Kuwait's domestic oil demand, again according to BP, has been growing at over 10%/year of late (19.8% in 2003), dwarfing all increases of its national oil production.
This pattern of domestic demand increasing much faster than production is common to more than nine out of 10 oil producers, both OPEC and non-OPEC. Net exports, therefore, will always tend to grow slower than national production. Conversely, world oil import demand is significantly higher than consumption demand. In 2004, for example, world oil demand rose 2.68 mbd, but import demand growth was about 3.1 mbd.
This is related
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ENIGMA
I understood that fibre optics was significantly more expensive than copper and hence would not be used where copper would would be adequate , but since reading your posting I have read up on the comparisons
Whilst not pretending to understand all of the technical matters I have discovered that it does appear that fibre optics still has significant advantages over copper even though copper can now be used for fairly high speed connections and that the price differences are not all that significant
Thank you for pointing this out ; maybe the article that I read on high speed copper connections ( and I cant recall where it was from ) gave me a wrong message
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WhiteHerron I read the same article but took it in the correct context, that it would allow Broadband over copper in Existing Subburbs without the huge cost of rewiring with Fibre Optic. But all new work would except some unusual locations would be in Fibre Optic
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ENIGMA
Yes , on reflection I have to agree with you totally
Thanks
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Mick100
Thanks , some good charts and comments there
Do you know if this is a " one off " or is it available as a regular report ?