Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Friday, October 27, 2006

Industrial Metal Friday

Copper ...

According to Bloomberg, copper inventories tracked by exchanges in London, New York and Shanghai jumped 187,079 metric tons -- to the highest levels in four weeks.

Eight of the 11 analysts and traders surveyed by Bloomberg expect copper to decline next week. Well, I guess that means it's sure to go up! LOL!

Seriously, I don't know where it's going next week (I'm so glad we took gains on a copper stock in Red-Hot Canadian Small-Caps yesterday, though). I do know...

Goldman Sachs expects supply to fall short fo demand by 52,000 tons this year.

BHP says output fell 19% in the most recent quarter from a year ago as workers at its Escondida Mine in Chile went on strike. And Freeport-McMoran said its third quarter output dropped 11%.

On the bearish side, according to, "On October 17, 2006, the International Copper Study Group (ICSG) said that its preliminary data showed that world copper production exceeded consumption by 10,000 tons in the first seven months of 2006."

But Dailyfutures also adds: "So far in 2006, world mine production is up 1% while world usage is up 2.9%. In 2005, world consumption exceeded production for the third consecutive year, by 102,000 tons. So far in 2006, Japan, India, and the European Union (15) are showing increased demand."

And Ken Keebner of CGM Funds says the earliest we can see incremental new copper production is 2009 or 2010.

Zinc ...

According to Reuters, zinc stockpiles monitored by the London Metal Exchange dropped 2.7 percent to 110,800 metric tons. That's the lowest since April of 1991. The 15-year low sent zinc prices to a record high.

Global use will increase 3.9 percent to 11.1 million tons this year and 2.6 percent to 11.4 million tons in 2007, the International Lead and Zinc Study Group said on Oct. 9. China is the world's largest zinc user. The worldwide supply shortfall is forecast at 420,000 tons this year by Societe Generale.

Check out my new gold and energy blog at