Watch the birdies...As per today's article below re the copper and Iron demand...it appears that the commodity sector is poised to rebound soon. Be careful of a potential takedown before the prices reverse quickly to the upside...just a possibility.
Short term trading in these markets is a hazardous occupation with some of the world's largest global funds losing bigtime...such as Paulson. The big banks and the Fed are in control of the manipulation on a daily basis. Their friends know what is coming and place their multibiullion bets accordingly before you and I have a chance...therfore we have to guess what they are doing. You wll also note that the likes of JPMorgan and Goldman often take the opposite trade agaisnt their own clients.
My guess is that we may see an orchestrated sharp downdraft and then a nice uptrend with the resolution (albeit temporary) of the Euro problems and then a QE3 stimulous from the US. Nervana! But they will attempt to fool all us "fools" by deft slight of hand in order to make billions going short then long.
As for a very interesting niche market like Titanium, I suspect the usual players think it will trend with the commodity sector in general whilst not really understanding that it is very different indeed and with a very bright future. Fundamental demand and pricing are going up, up up.
Illusions versus Reality in the Copper market
By Gary Dorsch,
Editor, Global Money Trends
October 10, 2011
Excerpts:
“…At last count, global demand for copper is not too far from record highs, and furthermore, demand for copper is expected to exceed new supplies by roughly 200,000-tons this year, leading to a supply deficit, which should buoy copper prices. “There has been some softening in copper demand, but not to the extent seen in the copper price,” said Richard Adkerson, chief executive of Freeport McMoRan Copper & Gold FCX.N, the world’s largest publicly traded copper miner. …the magnitude of the recent collapse in copper prices is very surprising, considering that the global demand for copper has increased by an average of +4% per year for the past 110-years. Furthermore, the size of the world’s population is increasing 80-million persons each year, thus placing even greater demands on the world’s resources….The middle class globally is growing at 70-million people a year, so just the marginal demand for these commodities is enormous and being driven by the major emerging markets. We see strength in commodity prices persisting for some time,” (Canada’s Central Bank, Mark) Carney said.
…As far as the copper market is concerned, the radar screen is squarely focused on the outlook for juggernaut Chinese economy, which consumes about 40% of the world’s supply of refined copper. In fact, the growth in worldwide demand for copper has been driven by China, increasing by a stunning +215% over the past ten years, to a record 5.1-million tons in 2010….
…Another reason cited for the surprising -35% drop in copper prices to its lowest in 14-months, is the rebound in the value of the US-dollar, against a basket of six currencies. A strong US-dollar makes copper and other commodities more expensive for holders of other currencies….There’s also speculation that Chinese users of copper might decide to take advantage of the sharp drop in prices, by replenishing their depleted stockpiles. In the warehouses in Shanghai, the supply of copper has been whittled down to as low as 98,000-tons. With excess stocks now extremely low and assuming the illusion of hard landing in China, doesn’t materialize into reality then China’s purchases of the red-metal could increase.Last October, Chinese traders began to rebuild their inventories of copper, by doubling the size of their stockpiles to 180,000-tons,..
…Chinese steel production continues to grow, expected to hit 680-million tons in 2011, up from 627-million tons in 2010, and 567-million tons in 2009. That’s 46% the world’s total output. In the 31-year time period through 2009, China’s economy grew an average +9% /year enabling it to become the world’s second largest economy. China’s steel industry, along with a number of other key industries such as the automotive, construction, textile, home appliances, and petrochemical industries are considered to be key barometers of its overall economy. Nearly 91% of the crude steelproduced in China, comes from integrated mills, which use iron ore. More than half of the iron ore has to beimported.
…China’s imports of iron ore in August totaled 59-million tons, up +8.3% higher compared with July, and up +32.5% from a year earlier. Yet index-based spot prices for iron ore fell -5% in September, skidding to $165 /ton today. “We continue to see robust business conditions for Rio Tinto products into China, particularly in iron ore. We would not foresee real significant changes in that demand profile in the next few months,” said Albanese.