Tuesday, October 5, 2010

Copper prices will touch $11,000 in 12 months

Soaring Demand Will Push Copper to $11,000------By Shan Saeed

Copper, Zinc, Palladium and Platinum are also deliberated in this research piece.....

I am a firm believer that demand-supply dynamics works in every commodity and in every market. Speculation just contributed to 17-20%5 of the total value of any commodity. Copper will trade at $11,000 a metric ton in a years time. The prices are raised because of swelling demand.

The forecast implies a 35 percent gain from the metal’s current price. I predicted that copper would trade at $8,050 a ton in 12 months. I strongly advised investors to buy the December 2011 contract as increasing demand leads to shortages of the metal.

Copper for three-month delivery traded on the London Metal Exchange jumped 23 percent in the third quarter, the most in a year, helped by falling stockpiles and a weaker dollar. LME inventories shrank by 17 percent in the period, and the U.S. Dollar Index, a six-currency gauge of the greenback’s strength, slid 8.5 percent, the most since 2002. Please check records..I talk with facts and figures....

“Supply-demand deficits look set to grow on emerging- market strength and improving demand from developed economies, which we expect to significantly outpace supply growth, drawing down inventories and creating market shortages. according to London-based Jeffrey Currie said in the report. “We don’t believe that the market is fully pricing these shortages and the potential for demand rationing that lies ahead in 2011.”

Zinc Prices

Three-month copper traded at $8,156 a ton at 1:38 p.m. on the LME. The December 2011 contract was at $8,025. Its three-month forecast for the metal to $8,500 and increased its six-month estimate to $8,800.

Copper will average $9,300 a ton next year compared with about $7,215 so far in 2010. Electrical equipment and construction are the main sources of demand.

The 12-month forecast for zinc to $3,000 a ton. The metal, used to rust-proof steel, will likely stay in surplus for now because of supply growth, though the market will be more balanced in the year ahead and “possibly swinging to times of deficit” next year.

Zinc for three-month delivery was last at $2,288 a ton on the LME, reducing this year’s decline to 11 percent. The metal will average $2,575 in 2011. Watch out my predictions and benefit from my expertise and experience. Already predicted a 12-month price of $2,225.

Palladium and Platinum Prices

Palladium and platinum will continue to surge as well. They are used in the auto catalyst industry to cut emissions. Catalyst in diesel engines tend to take higher loading of platinum, while palladium is more abundant in catalysts for gasoline engines. If we analyze the YTD growth of Platinum is 9.7% to $1600 while palladium has risen 31% YTD to over $567/ounce. Palladium is likely to lure investors more than platinum based on the large growth potential of the chinese car market which is surging at a phenomenal speed, a more limited supply, outlook for the metal and its inherent volatility. Palladium's lustre set to eclipse platinum moving forward

Golden Rule: Investors love owning assets where there is limited supply....

Disclaimer: This is just a research piece and not an investment advice. Please execute your own due diligence before making investment. Do your thorough research.

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