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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: zoo york who wrote (11254)	5/14/2006 10:53:36 AM
From: Mr. Aloha	Read Replies (1) \| Respond to of 78415

Froth or not, one thing that stands out to me is that the metals stockpiles continue to shrink. So often during past cycles, when metals prices started to rise, there would be a feedback loop of increased production leading to a glut, and then collapse. This time around, I do not think there is going to be a big increase in production anytime soon. I agree, particularly in the case of zinc. Look at the shrinking stockpiles of zinc at the LME (bottom charts): kitcometals.com. At the current rate, there will no zinc inventory left in the fall, and prices could go ballistic. As for a big increase in production, look at the chart of the coming zinc supply gap (first chart): greattrades.blogspot.com. With many big mines scheduled to close in coming years, there's not enough new zinc production coming online to even come close to keeping up with current demand. With demand increasing every year, the supply/demand situation will be way out of whack, likely leading to much higher prices over the long term. I believe there may be short-term froth in some metals where there are lots of speculators trading, but the long-term supply/demand imbalances will sustain this metals bull market for a lot longer than most think.