<I'm not following your logic>
If slack (above ground inventories) is gone, then supply going forward must equal demand. Right now, depending on whose numbers you use, demand exceeds supply by 400-800,000 MT tonnes a year, or 3-5% of all Cu usage. Demand can not exceed supply (mining production) if there are no reserve stocks. LME and Comex remaining currently stands at 131,283 MT.
Incidentally, there is now talk of mining production increases coming in late 2005, I've heard one million MT discussed, but sort of have my doubts, if anybody has a sense for this please chime in? $1.50 Cu may make that a possibility, but I doubt $1.30 will cut it. The challenge is the rest of the year and into 2005. Old mines are depleting too.
BHP Billiton at Escondida, page 3:
bhpbilliton.com
And spotted this, will be too late:
Phelps Dodge Corp., based in Phoenix, said it will triple output at the Cerro Verde mine in Peru to 300,000 tons a year by 2007. |
