Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (18507)	2/12/2004 1:04:18 AM
From: Rextar98	Respond to of 19219

Soaring Raw Material Prices Hit Economy By Kim Tae-gyu (Staff Reporter) Skyrocketing raw material prices may pose a serious threat to the economy combined with scarcity of industrial resources, market analysts cautioned on Sunday. They said domestic brick-and-mortar firms had a hard time in procuring raw materials and predicted an industry-wide crisis in the coming months due to the price hike. Medium- and small-sized companies, which are vulnerable to external shock, are expected to be the first victims of the anticipated crisis, as many of them are likely to stop operation should the high-flying price trend continue. Even more damaging are predictions the soaring input costs will trigger price hikes for other products across the industry, which will dent the economy's fragile recovery. "The hikes in material prices might delay the economic recovery by raising overall price levels and thus reduce Korea's overall purchasing power -- a vicious cycle which will weigh heavy on the economy", experts said. They stressed the government should step in and come up with proper measures to prevent such circumstances from threatening the health of the economy. Catching Up With Rising Prices The Reuters Commodity Index, which combines prices of 17 mineral and non-iron metals, started its rally from June, 2003 at 1,416.9 and finished last month at 1,671.1. Local electrolytic copper providers have struggled to secure their basic materials as China ate up the scrap. The price of electrolytic copper also rose to $2,389 per ton last month from $1,647 in October 2003. During the same period, aluminum prices ran up from $1,474 per ton to $1,610, leading the upward trend of prices for non-iron metals, including nickel and zinc. In the case of raw steel materials like scrap and billet, their prices are outstripping even those of steel. Billet was traded at $295 per ton in last year's third quarter but its price is hovering at the $420 level of late. Petrochemical resources also joined the price inflation, as ethylene tacked on $118 per ton to $725 from last December and benzene is selling at $570 per ton from $527 late last year. However, domestic outfits have struggled to ditch ways to buffer the negative repercussions of the ever-rising raw material prices, as shown in the confrontation between steel and construction industries. To avoid heavy losses, domestic steel makers recently raised the price of steel products, but construction companies have vowed to throw their weight to nullify the measures. Government Measures to Straighten Things Up To tide over the raw material problems, the government has rolled up their sleeves, but the ongoing crisis shows no signs of letting up. The Ministry of Commerce, Industry and Energy has tried to come up with proper countermeasures against the rising raw material prices. It lowered tariffs on some import items like nickel bar and alumimium bar as well as reducing tariffs further on items imported by medium- and small-sized companies. Also included in the package is a provision for two investigation teams, aimed at settling the shortage of steel scrap as well as monitoring monopoly of them. However, experts cast doubts on the effect of such policies, saying the measures are not appropriate for grappling with the lack of raw materials in light of the real culprit of the crisis. "The current raw material crisis was caused by China, as the country ate up all the materials to channel into their overlapping investment", Kim Kyong-won, a researcher at the Samsung Economic Research Institute, said. Portraying the Asian giant as the "black hole of raw materials", Kim recommended the alternative policy to cushion the impact of the crisis. He recommended to revise the government's strategy of keeping foreign exchange rates high, thus reducing the procurement costs of manufacturers. times.hankooki.com

To: J.T. who wrote (18507)	2/12/2004 10:08:11 AM
From: yard_man	Respond to of 19219

if it is becoming a buzz phrase, it's OVER. <g> Glad u showed up <ng> See PM in a minute ...

To: J.T. who wrote (18507)	2/15/2004 6:11:29 PM
From: Ken Reidy	Read Replies (2) \| Respond to of 19219

Secular Bull??....perhaps you should consider another explanation for the stock market rally...it has been entirely currency driven. The Secular Bull you are referring to is nothing but a currency mirage...the Dow has gone nowhere over the last 18 months in terms of the Euro or Yen. Economic statistics reveal no recovery...especially when one looks at the most important economic statistic...employment. The only reason the stock market has done well the last 18 months is due to dollar weakness. If the dollar continues to weaken...the stock market will do fine until people realize the damage a weak currency will have on our economy...that it will lead to inflation and higher interest rates...then there will be a rush into commodities and the stock market will sell off hard. I could be wrong...but one should at least consider this as a possibility. I give you Friday as the most recent example of what I am talking about. The stock markets gap up on disappointing trade deficit news because it is viewed as dollar negative. At 9:45...a second dose of negative news hits....very disappointing consumer confidence. Perception....dollar negative....so stock market surges up for 15 minutes. At 10:00...massive currency intervention occurs to strengthen dollar....result...stock market sell off because dollar strengthens. One needs to consider what is going on here...many of the rules have changed...we have central bankers panicking and spending billions of dollars to weaken their own currencies. I feel their desperation and I think it is prudent to be cautious regarding the so called secular bull market. I think the stock market might do fine as the dollar falls to 80...but when 80 eventually fails to hold and it starts heading to 60 and maybe lower...investors will start to figure out that a weaker dollar is not a good thing.