Industrial Insight

copper up, more mining…. | November 22, 2010

http://www.forbes.com/2010/11/19/goldman-sachs-commodities-copper-markets-gold-bhp-billiton-freeport-mcmoran.html

StreetTalk With Bob Lenzner

Stick With Commodities But Be Nimble In 2011 Says Goldman Sachs

Robert Lenzner, 11.19.10, 05:37 PM EST

You can start by being bullish about copper. There are only four days of copper supply on the London Metals Exchange and Shanghai. So, the State Council-funded Strategic Reserve Bureau (SRB) has been buying copper to build up its inventory during these last several volatile trading sessions. Iron ore and thermal coal prices have been holding firm in China as well. In contrast, China is believed to be selling zinc and aluminum out of its inventory.

So don’t let the headlines about China putting on the brakes put you out of your preferred commodity plays for 2011. At least one British bank in China believes it’s possible the Chinese will decide on a total ban of all commodity exports as they already have done in rare earths in order to control their economic short-term destiny.

Goldman Sachs’ commodity research mavens predict that copper will be selling at an average price of $11,000 per metric ton, a sensational 35% return from the current level around $8,200 a ton. Goldman predicts “exceptionally large deficits (in copper) over the coming year.”

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