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Morning all .should be a good day for commodities. Been mentioned chinese are propping up there economy ,saving slow down.
Morning all .should be a good day for commodities. Been mentioned chinese are propping up there economy ,saving slow down.
True..
I am bullish on kaz but yes good idea to be mentally prepared to take a short term hit if required to make money over long term.. I think I have got stretched a bit but then I need to sit tight....now and wait....for all speculators to close their short position and for copper to come back at $3 soon.
Causal
if you do the maths then it is very simple
China is and will remain largest consumer of copper
so logically any copper assets china would be very interested to ensure long term supply as it is and will be net importer of the metal. however most copper is produced in Latin America so logically china would rather focus on assets near to its border Siberia, kaz etc... kaz fits that perfectly .
now look at political environment. kaz and Russia are suited to china better than any one else .
I think it is a matter of time , Chinese will invest and help kaz build huge copper capacity which can fuel Chinese growth. in turn Chinese get part of the money being lenders and investors on one hand and get to deliver all projects on the other hand.
so when Chinese loan 2.5 billion to kaz guess what happens...80% of that money immediately flows back to Chinese as projects to deliver the mine and then they get good return on the loan as well.
another interesting article in wall street journal
Fall in Copper Prices Threatens to Drive Metal Shortages
Copper is about 14% below the $3-a-pound level believed to make many long-term projects viable
https://www.wsj.com/articles/fall-in-copper-prices-threatens-to-drive-metal-shortages-11565352000
interesting it says
But world refined copper is expected to see a supply deficit of about 190,000 metric tons in 2019, with that deficit widening to 250,000 metric tons in 2020 as refined production lags behind usage, according to an International Copper Study Group report released in May.
An Aug. 9 U.S. Commodity Futures Trading Commission report showed net positions for large speculators in U.S. futures markets at minus-58,400 contracts as of Aug. 6, according to Investing.com.
I think I future contract is 2500pounds (please correct me if I am wrong) which means speculators have shorted copper to the tune of 1460 m pounds of copper or 0.66 m tonnes...well thats considerable and I am sure they would need to close their position soon.
when I did further looking around here is what I found.
https://uk.investing.com/economic-calendar/cftc-copper-speculative-positions-1620
last few days is the highest short position in last 4 years and its gone from 0 in may to -0.66m tonnes . no wonder copper is down that more than $3.6 billion shorting....more than 3% of annual copper production in the world and twice the amount kaz produces in a year. this is just in us exchange . and I guess the same would be in London and other major exchanges. no wonder copper is down..the question is how long can speculators keep shorting?
Much as I thought let's just hope that copper picks up asap
I have little worries once it's in the 275 to 290 range as 500 or so dollars a ton makes a big difference to the bottom line
Thanks tucson and rastuss
Just wondered if you noticed in the accounts that net cash had gone down by 700m
of which about 450m was to pay for Baimskaya, so not being an accountant I was wondering where the other 250m went to ,i assumed towards paying off debt .
The debt repayments for this year and next is 545m which seems like an awful lot when the copper price is low.Furthermore free cash flow has been reduced from 308m to 182m which again is a big drop
These are just my observations I would appreciate anyone who could explain that this is not a matter for concern
With being an, Long term holder, tuscon ,Thanks for your reviews on experience,
What Is Dr. Copper Saying About Global Markets?
https://www.investing.com/analysis/what-is-dr-copper-saying-about-global-markets-200455958
Have a look at the chart for copper in the Article , then compare it with the one below
I think they are almost identical ( Symmetrical Triangle Pattern)
Now look at the chart below again to see where it will go when it beaks out upward !
I reckon Copper will go to $4.5/ lb
https://school.stockcharts.com/lib/exe/detail.php?id=chart_analysis%3Achart_patterns%3Asymmetrical_triangle_continuation&media=chart_analysis:chart_patterns:symmetrical_triangle_continuation:symtri-conti-sun2.png
I read these articles yesterday along with one on Bloomberg with an interview with GS head of commodoties who agrees that copper will pop and no doubt as tucson has pointed out it could be anytime in the next 12 months
My concern like I have stated earlier that this doesn't help Kaz for the remainder of this year and if copper stays the same price I don't know whether it will have enough to meet its debt repayments for the second half
Anybody like to give their view
Here'sanother one http://c.newsnow.co.uk/A/996808805?-22269:9283 .@hash if you put money on, when would a partnership come off Q1 next year.
https://www.barrons.com/articles/copper-prices-may-take-off-as-supply-tightens-51565953200
I am surprised why investors aren't getting into copper. even if there was us china trade war you would still need copper and given that demand is increasing and supply is not at some point of time there will be significant shortfall. is someone managing / manipulating copper prices or can they be manipulated at all?