Lions Gate Metals Blog

 

Here is an excellent pair of articles by Derek Scissors, noted analyst and China-watcher from the Heritage Foundation, of Washington, D.C.  Mr. Scissors’ work is of interest to anyone following China’s economy and trying to gauge its impact on the greater World Economy.

 

China’s Stimulus: More of the Same, and Not That Much More  [Derek Scissors - The Motley Fool]

Liberalization in Reverse [Derek Scissors - The Heritage Foundation]

The writer of this article encourages us to keep an open mind when we approach the markets and not be slave to any one market concept or approach:

 

Bear Market Rally Infused with a Shot of Inflation [Brett Owens - Seeking Alpha]

 

The following is an excellent piece of analysis of the current market situation.  If need’s be, read it twice; there is a lot of good information and commentary hidden away in it:

 

The ‘Bull or Bear’ Debate Will Be Resolved Soon [Steven Vincent - Seeking Alpha]

 

The writer of this article suggests, quite rightly:  “Almost everyone is looking for a tipping point. At this time we are looking for signs that the decline in the economy and in the financial markets is lessening and that we might be somewhere near the bottom. If this is the case, then can the turn to recovery be far behind?”  A well-balanced, well-thought-out piece, well worth the read:

 

Are We At a Tipping Point? [John Mason - Seeking Alpha]

admin Chinese Markets, Global Copper

 

The copper market is gradually strengthening in response to supply falling short of demand. 

The long term is what really drives the metal market, but journalists and pundits have to keep themselves in jobs by regularly coming up with minor variations on the same theme. 

These ups and downs will continue through the Northern summer as we enter the vacation season and, over all, the copper market will strengthen in the long term. The strengthening of the BRIC economies will tend to smooth out minor market fluctuations as time goes on, but we have a long way to go:

Copper gains as demand rises, turnaround seen

MICHAEL TAYLOR

Reuters

May 7, 2009 at 6:45 AM EDT

LONDON — Copper climbed to a three-week high on Thursday as rising demand and expectations of economic recovery supported base metal prices and investors eagerly awaited the U.S. government’s stress tests on banks.

By 0914 GMT, copper for three-month delivery on the London Metal Exchange rose to $4,823 (U.S.) a tonne from $4,750 at the close on Wednesday and compared with a session high at $4,834.

Tin soared to a near six-month high at $14,249, as analysts said short-covering and technical buying by funds was affecting a tight market.

But it is the macro picture which has dominated sentiment and helped boost industrial metal prices in recent weeks, as investors see improved demand expectations and begin to talk of a recovery in the global economic downturn.

On Wednesday, data showed private-sector U.S. job losses slowed sharply in April and planned layoffs declined.

“More encouraging data showing that we’ve got more stability of the wider economy – at least things are not getting worse,” said Robin Bhar, senior metals analyst at Calyon.

But analysts said the positive sentiment could be short-lived, with the results of the regulatory stress tests for the top 19 U.S. banks due at 2100 GMT.

“There has also been lots of leaks of the stress tests which seems to be better than the market was expecting,” Mr. Bhar said.

“Everything seems to suggest that there is more confidence … but I’d be very cautious that this can be sustained and doubt we can sustain these levels.”

Investors also looked to any currency movements as the European Central Bank prepared to announce its interest rate verdict.

A stronger U.S. currency makes metals priced in dollars more expensive for holders of other currencies.

Prices of copper, used in power and construction, have risen more than 50 per cent this year, as a rise in cancelled warrants – material earmarked for delivery – helped boost sentiment.

On Wednesday, cancelled warrants rose to 74,875 tonnes from 71,225 tonnes the day before.

Analysts said the material is most likely heading for China.

LME copper stocks rose for the first time since early April on Wednesday but normal service resumed on Thursday, with inventories down 8,250 tonnes to 393,900 tonnes.

“Yesterday was perhaps a one off,” said David Wilson, director of metals research at Societe Generale. “A trader looking to cash in on delivery in physical metals.”

“Everyone has taken a more positive view given the recent PMI data that came out in China,” he added. “General economic sentiment is seen as more positive.

“Obviously we are seeing a pick-up in Chinese activity … I just have concerns that if Chinese buying begins to slow down.”

 

At some point, all cups can be viewed as half empty.  Besides, the pundits need something to babble about tomorrow – it is the long term market that really counts.

admin Global Copper

[Source: Toronto (Reuters)  March 02, 2009]

Despite a sharp dip in economic growth this year and next, Chinese investment in foreign companies should continue to surge as the country tries to lock in access to resources, a mining conference in Toronto was told on Monday.

Chinese foreign direct investment outside the financial sector hit $40.5 billion last year — up from a measly $700 million in 2001 — and should continue to climb for at least the next two years, Kobus van der Wath, managing director of business strategy firm Beijing Axis told the Prospectors and Developers conference.

“This is one of the most important trends unfolding in the mining sector, and one that I think is likely to continue,” he said in a presentation entitled “China Inc is going global.”

The sentiment should be welcome among the hundreds of capital-starved junior miners that have come to the conference to strengthen industry ties, look for financing opportunities, and explore partnerships with other companies.

Flagging global growth and tight credit markets have sapped demand for metals and limited financing options for explorers and developers of industrial metals.

While the growth slump will not spare China, the country’s appetite for access to foreign resources has shown no signs of easing, van der Wath said.

He noted that foreign direct nonfinancial investment announced in February alone was $25 billion, due largely to state-owned Aluminum Corp of China’s $19.5 billion investment in Australian miner Rio Tinto (RIO.AX: Quote).

On China’s role as a top consumer of metals, van der Wath said China’s expansion story is far from over, although he said said that in the short term, the country’s trajectory is “changing significantly”.

He said growth should slide to 5.6 percent this year from a seven-year low of 9 percent in 2009. Growth should hit 7.5 percent in 2010, he said, but added that the forecasts could be too optimistic.

He said factors such as government stimulus measures and construction projects in the vast areas of Western China should continue to underpin expansion well above global growth levels. (Reporting by Cameron French; Editing by Peter Galloway)

admin Global Copper