Commodities / Raw Materials

[Mick100]

Interview with Jim Rodgers on FSO


http://www.financialsense.com/Experts/2005/Rogers.html

[stolwyk]

I believe this tread should do well; thanks for introducing this subject. It will fill an important gap.

Cheers,

Gerry

[Mick100]

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SILVER - Investment Opportunity of the Decade

Richard Greene

The environment for investment opportunities is, right now, in the process of undergoing a radical change that only a relative handful of investors has come to recognize. A vastly greater number of people believe they are going to become wealthy over the next decade by investing in technology stocks, rather than in the areas we have targeted. When all is said and done at the end of the next decade, we believe silver and silver stocks will have been by far the best performing asset classes on the planet.

First, we think it is appropriate to view the historic bear market that has unfolded since (not 1980 as many believe when silver hit $50, but) 1477 when silver hit an equivalent $806 per ounce!

www.goldinfo.net/silver600.html

When one views this stunning chart (see above link), it is most amazing that for one to appreciate the investment merits of silver, it is not even necessary to rely on silver returning to its historic role as money, although that would truly be the icing on the cake.

Silver is an industrial metal whose price has fallen so low that only a handful of primary silver producers are efficient enough to produce silver profitably. Much of the world's silver production today is produced as a byproduct of gold, copper, lead, and zinc. Many market observers are dumbfounded and question why these producers would continue to sell their product into the market at a loss. Some observers, most notably Jason Hommel and Ted Butler have prodded managements to do the opposite, by either withholding their production or using their excess cash to buy silver. In light of the increasingly rapid money creation, this appears to be a brilliant strategy. Silver Standard (SSRI) has lead the way by purchasing silver on the open market, and Nevada Pacific Gold (NPG) - Toronto is another producer that has announced it will withhold some production.

The truth of the matter is that supply is rapidly drying up. The US Government had a 60-year stockpile of silver that has been completely depleted. There has been a supply deficit in silver for 15 years running and this year the deficit could be as high as 50 million ounces. It is uncertain how or if this deficit will be filled. Whereas 95% of the gold that has been mined still exists, estimates run that only between 250 and 650 million ounces of the silver that has been mined is still in existence, excluding silver jewelry. This means that there is probably as much as seven times as much gold still in existence as silver. In addition, silver is incredibly cheap relative to gold. The long run price of gold to price of silver ratio has been about 16 to 1. Currently, the ratio exceeds 60 to 1 which suggests that silver should appreciate several times the rate of appreciation of gold. The reason this could be explosive is there are a multitude of commercial uses for silver that are difficult if not impossible to replace. Much is made of the replacement of traditional photography with digital photography and its bearish implications for silver usage. Realistically, a good portion of the world's population does not own a computer and in the huge population centers such as China and India, it is much more likely that growth will be seen from these countries in the traditional photography area which uses silver. Silver's unusual chemical properties ensure increased demand in high technology and medical markets which make up 40% of demand. Among its most important properties: it is superconductive, highly reflective, malleable, ductile, it endures extreme temperature ranges, and has electrically low contact resistance. While demand from these areas alone are enough to make the silver story an exciting investment theme, the real home run is if silver returns to its more traditional role in history as money. Incredibly, while not given much publicity this is already happening in at least two US states.

We feel strongly that paper

[Packersoldkidney]

http://www.theage.com.au/news/Busine...423556573.html

[Mick100]

TANTALUM

Tantalum is a rare, grey-blue metal used primarily in the electronics industry in the manufacture of capacitors, devices that regulate the flow of electricity within electronic circuits. Tantalum has a number of properties that make it a valuable commodity, including:
High Boiling Point (5,425°C)
High Melting Point (2,997°C)
Resistance to corrosion
Ductile ie it alloys well
Superconductivity
Low co-efficient of thermal expansion
High co-efficient of capacitance (capacity to store and release a charge)


Tantalum Applications

The electronics industry is the largest single consumer of tantalum; it is primarily used in the manufacture of capacitors, devices that regulate the flow of electricity within an integrated circuit. Tantalum capacitors are found in many every day devices such as mobile phones, lap top computers and video cameras. Another increasing application for tantalum is as an alloy in the manufacture of turbine blades for power stations and jet engines, where tantalum improves the structural integrity of blades at high temperatures, enabling turbines to operate at higher temperatures, thereby improving fuel efficiency.

History of Tantalum
Geologically tantalum often occurs with tin and until relatively recently, tantalum was regarded as an impurity that attracted penalties to the tin price. Tin was historically produced via dredge operations, mainly in SE Asia, that resulted in large, often high tantalum grade bearing tin slags. Historically, tin slags were the largest source of tantalum, today however, these slags are depleted and they are a less important source of tantalum. Tantalum supply is now dominated by hard rock sources where tantalum is the primary metal of interest.

Tantalum Demand
There is little public information on the tantalum market and tantalum pricing. The Tantalum Institute (“TIC”) is an organisation of many of the world’s tantalum producers, traders and users whose objective is to collect and distribute information on tantalum to its members. Until recently the TIC collected, on a confidential basis, information on the purchases, sales and applications of tantalum from its members and then published that information in a bi-annual bulletin.

These TIC statistics showed that tantalum demand rose steadily from just under 3 million lbs of tantalum in 1993 to over 6 million lbs of tantalum in 2000. The increase in demand was largely driven by the electronics sector, where demand for high performance and miniature electronic goods, such as mobile phones and personal organisers, made its properties particularly attractive. In 2001, as a result of the global economic slow down, demand fell quite dramatically to 1999 levels of approximately 4 million lbs tantalum. Unfortunately in 2002, for legal reasons, one of the world’s largest refiners of tantalum decided to no longer supply this information, so even this limited source of information is now no longer available.

Tantalum Market
Unlike many of the more common metals such as copper and nickel there is no central market for tantalum, as a consequence it is often difficult to determine the price of tantalum. The difficulty in establishing a current price for tantalum is further complicated by the fact that there are many different types and grades of tantalum raw materials, all of which have implications for the refining process.


Source of info:
http://www1.sog.com.au/pages/tantalum.asp

[k1w1]

Heavy Metal- Spinal Tap.

We all have our favorite heavy metal but for me Spinal Tap will always
hold a special place. Apart from a series of unfortunate incidents involving their drummers it is the first amplifier that went to eleven that shows how this was a band that was always pushing the boundaries.

[Packersoldkidney]

Nigel: This is a top to a, you know, what we use on stage, but it's
very...very special because if you can see...
Marty: Yeah...
Nigel: ...the numbers all go to eleven. Look...right across the board.
Marty: Ahh...oh, I see....
Nigel: Eleven...eleven...eleven....
Marty: ...and most of these amps go up to ten....
Nigel: Exactly.
Marty: Does that mean it's...louder? Is it any louder?
Nigel: Well, it's one louder, isn't it? It's not ten. You see,
most...most blokes, you know, will be playing at ten. You're on ten
here...all the way up...all the way up....
Marty: Yeah....
Nigel: ...all the way up. You're on ten on your guitar...where can you go
from there? Where?
Marty: I don't know....
Nigel: Nowhere. Exactly. What we do is if we need that extra...push over
the cliff...you know what we do?
Marty: Put it up to eleven.
Nigel: Eleven. Exactly. One louder.
Marty: Why don't you just make ten louder and make ten be the top...
number...and make that a little louder?
Nigel: ...these go to eleven.

[Mick100]

URANIUM



Following the advance of nuclear power generation over the last decades, uranium has become one of the
world's most important energy minerals.
Currently, uranium from nuclear reactors generates over 16% of the world's electricity or about 2,400 billion
kWh each year, which is equivalent to 12 times Australia's total electricity production. It comes from over 440
nuclear reactors with a total output capacity of more than 350 000 megawatts (MWe) operating in 31 countries.
In addition, 28 reactors are under construction and a further 71 are being proposed.


Australian Market
Australia is now one of the world's major producers and exporters of uranium, providing about 25% of world
uranium supply. Major countries buying Australian uranium include USA, Japan and South Korea.


Australia’s reasonably assured resources of uranium represent around 28% of the world total reserves.
Known Recoverable Resources* of Uranium
Tonnes Uranium Percentage of world
Australia 989,000 28%
Kazakhstan 622,000 18%
Canada 439,000 12%
South Africa 298,000 8%
Namibia 213,000 6%
Russian Fed. 158,000 4%
Brazil 143,000 4%
USA 102,000 3%
Uzbekistan 93,000 3%
World 3,537,000 100%
* Reasonably Assured Resources plus Estimated Additional Resources - category 1, to US$ 80/kg U



According to international policies regarding nuclear power, uranium can be sold only to countries which are
signatories of the Nuclear Non-Proliferation Treaty, allowing inspection to confirm that it is used only for power
generation purposes. Importantly, customer countries for Australia's uranium must also have a bilateral
safeguards agreement with Australia.



Supply x Demand Forces
Fundamentally, uranium prices are expected to remain above US$20/lb. While world consumption is currently
about 78,000t U3O8, mine production is around only 42,000t. The gap from consumption and production is then
filled up with stockpiles and recycled military uranium. As most of these stockpiles are largely depleted, concerns
regarding a supply deficit have driven spot prices from US$10/lb U3O8 in early 2001 to nearly US$20/lb U3O8 in
mid 2004.


Historical U3O8 Prices

1987 - $17/lb
1988 -
1989 -
1990 -
1991
1992 - $7/lb
1993
1994
1995 - $9/lb
1996
1997 - $16/lb
1998
1999 - $8/lb
2000
2001 - $7/lb
2002
2003 - $10/lb
2004 - $20/lb



Over the last decades, increasing fuel demand has been partly offset by the implementation of power reactors’
operational efficiencies. Consequently, uranium fuel requirements have increased at a lower pace than power
reactors have increased their capacity.
Currently there are 28 new reactors under construction around the world, with another 35 on order and a further
71 at the proposal stage. Assuming that all these reactors come into operation, demand for uranium will increase
by more than 30% in order to meet future nuclear power needs.


While the construction of nuclear power reactors is capital intensive, they are relatively cheap to operate
compared to gas/coal fired power stations. The cost of fuel for a nuclear power station is less than for an
equivalent coal fired power plant, making nuclear reactors competitive with coal and gas plants.
As coal raises environmental issues on its emissions and gas prices rise, nuclear energy looks progressively
more attractive. In 2002 Australian uranium exports saved the emission of some 290Mt of carbon dioxide. In a
greenhouse conscious world, nuclear power has now the potential to increase its share of the electricity market
at a faster pace than in the past.
A major supply deficit
is expected from
around 2008.
Expectations of growing uranium
demand over the next decade are
also supported by the World
Energy Council forecast that
electricity demand should almost
double from 1990 to 2002 and
concerns regarding the emission of
greenhouse gases.


Source - Martinplace Securities report

http://www.summitresources.com.au/

.

[Packersoldkidney]

Here's one for ya Mick that I was gonna put on my iron thread, but yours is at the top of the page and I'm too lazy to scroll down to mine located just below yours.

Steel producers bet on new market dynamics

`For the next 10 years, steel prices are going to be higher than the ones obtained in the last 10 years.'

THE SUNSHINE days are here again for the Indian steel industry. A combination of factors appears to be working to push it on to a higher orbit. If the steel producers are grinning, consumers at large are wearing a grim look. The way the industry is slowly moving into a new era, chances are that prices will head only one way - northward.

In the emerging global scene, experts predict a shift in steel use away from the developed world towards populous nations like China and India.

B. Muthuraman, Managing Director of Tata Steel, is convinced that the steel dynamics will witness a dramatic change in the next 25-30 years. A quick recap will be in order before taking a peep into the future.

Steel making has come a long way since its commercial production in 1856. In the first six decades of the last century, there was only an upward movement in steel consumption. The growth averaged around 7-8 per cent a year. Subsequently, the growth rate halved over the next 30 years. From 1980 to until a couple of years ago, the rate slumped further and was hovering just around 2 per cent.

Saturation in U.S.

The reasons for the slide are not far to seek. The slowdown is primarily explained by the fact that the per capita steel use in the developed countries has settled down to the sustainable level of around 300 kg. "The U.S. does not build any more houses. By this, I do not mean that no houses are being built. I mean they are building very few houses. This is because the population increases in that country is marginal. So, very few houses, bridges and roads are getting built,'' Mr. Muthuraman says. Major U.S. steel consumption is in consumer durables such as cars, refrigerators and domestic appliances.

Even in a developed economy, the sustainable level of consumption is only 300 kg per person. "When a country is in infrastructure creation mode, the per capita consumption goes above 300 kg to even 1,000 kg and then comes down and remains stable around 300 kg,'' Mr. Muthuraman points out.

Given the fact that even in an advanced nation the sustainable level of per capita consumption is 300 kg, the six billion people in the world should be consuming close to two billion tonnes of steel. At the moment, however, the global steel consumption is just half of this. How do we scale the potential? This can happen if countries across the globe can scale the quality levels obtaining in the developed nations like the U.S., Japan and Europe. Even if a nation reaches that level, a steel consumption of 300 kg per person may still be required. If the population rises, the demand can go beyond the two billion tonne estimate.

The U.S, Europe, South Korea and Japan may have hit the dead-end vis-a-vis infrastructure growth. Further, they do not have a great people size to drive steel consumption further up. "The U.S. population is about 300 million. Europe has 300 million. Japan has 120 million or so. With such populations, the infrastructure creation gets completed quickly. And, a stable level of consumption is reached,'' points out Mr. Muthuraman.

After these nations reached a stable level, China is now on the upsurge. Chinese consumption of steel this year is slated to be in the vicinity of 290 million tonnes for a population of 1.3 billion people. This works out to a per capita consumption of 220 kg. A sizable part of China is still backward. So, there is huge scope for per capita steel consumption to go up substantially. "I can tell you that it may reach 600-700 kg in the next 15-20 years. It will then settle down to 300 kg,'' predicts the Tata Steel Managing Director. Ipso facto, he feels that ``the steel consumption... and economic prosperity in the world has now shifted to more populous countries. Therefore,

[Mick100]

Oil prices surge

An International Energy Agency report stresses a strain from rising demand and weak supply growth.
February 10, 2005: 10:30 AM EST

LONDON (Reuters) - Oil prices jumped Thursday as the International Energy Agency said faster-than-expected demand and disappointing world supply growth threatened to keep the strain on world supplies.

The IEA's monthly Oil Market Report cut its forecasts for non-OPEC supply growth, especially from Russia where supply has boomed in recent years.

The agency, which advises industrialized nations on energy policy also revised up its 2005 oil demand forecast and reported a heavy fall in oil stocks during December.





Light crude for March delivery was $1.19 higher at $46.65 a barrel following the report. London Brent crude was up 89 cents at $44.02.

Lower expectations for Russian production growth and ongoing problems in other non-OPEC producers threatens to maintain the supply strain that fueled last year's 34 percent oil price rise.

"While 2004 was characterized by surprises in demand, 2005 has begun with changed to the expected supply," the Paris-based agency said.

The IEA also revised upwards world oil demand growth estimates by 80,000 bpd to 1.52 million bpd, based on a robust Chinese and South Asian outlook.

The IEA warned however of the danger of an economic slowdown, adding: "The impact of the oil price rise over the past year has been felt and will continue to be felt in 2005."

Latest official data Wednesday had shown that crude stocks in the United States are more than 20 million barrels above year-ago levels, while inventories of gasoline were nine million barrels in surplus to last year.

Dealers said news that top exporter Saudi Arabia would maintain supplies at current levels in March had reduced the chance of an imminent cut in output by the OPEC producers' cartel.

The Organization of the Petroleum Exporting Countries is due to review production policy on March 16 in Iran. Dealers had been wary that rising supplies and any sharp fall in prices may trigger an early OPEC cut agreement by telephone.


source: http://money.cnn.com/2005/02/10/mark...reut/index.htm

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