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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (6360)	4/19/2008 11:01:15 AM
From: RockyBalboa	Respond to of 71475

Right. Technical rates of substitution may be a guideline but change a lot once demand is tilted towards one product. I learned that the hard way in that the $6 gas for oil relationship did not last. Regarding demand and supply dynamics I often remember the example our energy trading bosses told us in 2001. There are also references to it on the net. Alcoa found that the demand and price of aluminum was relatively low and spot prices of electricity rose dramatically. In former times a producer would have stubbornly continued with production and stockpiled at a loss. Here, Alcoa decided to simply stop producing and rather re sell the excess electricity from their long term delivery contracts at premium prices... It took some time until electricity prices normalised but ultimately and thanks to the reduced alu production the metal also started creeping. the-spark.net