CAREY Smith, an analyst with Alto Capital Research, made the understatement of the week by saying that global economic uncertainty rendered commodity price forecasting a challenge. Last Monday in this space we dealt with copper going below $US7000 a tonne as something that may happen but probably not for a while anyway. That proved a little off the mark. Once the London Metal Exchange opened on Monday, the red metal hit $US6800/tonne before clawing its way back over $US7000 by the close. It was not a good look. Copper was down again on Friday to $US6880/tonne but -- according to some analysts' comments -- there was a concerted effort to ramp up the price just before the close to see copper finish at $US7019. Another finger in the dyke. Smith was talking at the annual nickel conference in Perth and was predicting extreme volatility in prices between $US17,500/tonne and $US22,500 over the next four years. He argued that new mines would leave the market flush with nickel, but the metal's price was unlikely to fall below $US15,000/tonne for any extended period and the market would lift from 2014. Start of sidebar. Skip to end of sidebar. End of sidebar. Return to start of sidebar. It's a perilous business, this forecasting -- which is why analysts are routinely issuing revised forecasts when things don't quite work out as planned. Over the weekend it was reported that the Nikkei commodity price index had, in September, taken its biggest monthly dive since the height of the GFC. Nickel closed at $US17,600/tonne on Friday, falling by 5.7 per cent on the session. You can see the volatility of the market from the day's trading extremes, with nickel going from $US18,910 after the LME opened on Friday but at one stage touching $US17,545 -- a range of $US1365 in just one trading session. It was only in March 2007, although it seems a lifetime ago, that nickel went through $US50,000/tonne. As for the risks of sticking out your forecasting neck, it was just 18 months ago that leading British commodity forecaster Roskill saw a robust stainless steel sector in 2011 and the possibility of prices once again surging to $50,000 soon after. Back to Friday's action, and tin was also acting up, with trades varying from $US21,600/tonne to $US19,800, or a range of $US1800 in the session. The zincing feeling continues, with that metal closing at $US1860 and lead also in the dumps. Of course, there was a good deal of book squaring for the end of the quarter. With the Chinese on holiday this week, it's hard to say what might happen, but any substantial bounce seems unlikely because it would have to be predicated on news of Chinese metal buying, something that doesn't happen this week. But to put it all in perspective, we reported online during the week the comments by Fat Prophets that it was sentiment rather than any big dent in demand that was driving down copper. That applies right across the base metals complex. Brokers Intersuisse, in putting a "buy" on Morocco explorer Kasbah Resources (KAS), said they believed the tin market to be fundamental deficit but the rise in LME stocks was due to sale of inventories in China and higher production in Indonesia. "We are still believers in the tin price," they added. Meanwhile, many have been spooked by the recent selloff in gold. But we note several comments that many traders sold the metal because their gold positions were the only ones showing a profit as September 30 loomed, and they took those profits. They had nothing else to sell that would dress up their books for the quarter. Europe continues to unwind. Commentators over the weekend are calling the German bailout vote "too little, too late", Greek public servants are striking and delaying that country's rescue package and the IMF has rushed to give Romania a E675 million ($935m) "precautionary" loan as the wheels come off that EU member. It is only a matter of time before the money printing presses move into overdrive once again and gold will be back on an upward path. Minnows soldier on ON a (much) brighter note, the exploration sector is still very much on the front foot, it would appear. The big fear is that if -- at Pure Speculation we believe it's "when" -- we have a double-dip global recession, we shall see a repeat of 2008 with the junior sector and investors taking fright and pulling down the shutters. So far, though, so good, with companies pressing on with plans. Overall, juniors seem to be ramping up their drilling programs and acquiring new ground, a trend that shows the slump in share prices has not cowed them. We had better hope this continues; we need more discoveries both here and abroad. What is particularly encouraging is that many recently listed companies are getting on with the job rather than pulling in their horns. Rumble Resources (RTR), which listed three months ago, has bought two more projects in Western Australia, one gold and the other copper-gold-uranium. Another recent newcomer, Conto Resources (CNO), is expanding its ground around Leonora with applications for two more tenements. A May listing, Rift Valley Resources (RFV), has picked up the Maji Moto gold project in Tanzania, 28km south of Barrick Gold's large North Mara gold mine. The ground includes an old goldmine worked into the 1950s while small scale local miners are active on the tenements. Money managers trading on New York's Comex slashed their long positions in silver last week, but this has not deterred July-listed Silver City Minerals (SCI) which has begun drilling its Maybell silver project, 20km north of Broken Hill. An earlier hole on the ground returned 4m at 608 grams/tonne silver starting at 17m below surface. In all, it was also heartening to see that eight resources floats got away in September. Unfortunately, many of those still in the IPO queue have as listing dates that ominous term "to be advised". Among those with greater longevity, Thor Mining (THR) has started new drilling to extend mineralisation at its Spring Hill gold project just south of Darwin. The deposit was discovered around 1880 and about 20,000oz was produced. Thor's estimated resource stands at 274,000 contained ounces. Poseidon Nickel (POS) has expanded its West Australian exploration ground by another 203sq km, signing an earn-in agreement with Magma Metals (MMW) for nickel, copper and platinum metals rights on ground adjoining its advanced Windarra nickel project. Japanese show grit WHILE investors here seem to jumping at shadows, perhaps we need to adopt a little Japanese true grit. A spa resort and theme park at Fukushima reopened on Saturday after closing for seven months due to the nuclear threat. To get the guests in the mood, 28 hula dancers performed a welcoming ceremony. Bookings are reportedly heavy. And for investors in uranium stocks, it will be encouraging that new Prime Minister Yoshihiko Noda sees nuclear power as necessary for economic growth. Also, as we noted in the local papers while passing through Tokyo last week, safety checks are proceeding at several of the closed reactors in Japan -- which rather suggests they're on the path to restarting. brombyr @theaustralian.com.au -----------
manche träume begraben wir, weil die zweifel größer sind als die vision |
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