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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (33860)	3/9/2009 6:16:53 PM
From: LoneClone	Read Replies (1) \| Respond to of 193231

The tattered mining sector waits in anticipation for recovery All eyes are on China, hoping that it will regain its enormous appetite for metals and rescue the run down mining sector. Author: Eric Onstad Posted: Friday , 06 Mar 2009 LONDON (Reuters) - mineweb.com Mining industry players, burned by a collapse in prices after several years of booming markets, are prepared for an extended downturn, hoping China will eventually regain its enormous appetite for metals. "The underlying fundamentals in the developed world are bleak and look set to remain so for some time," RBC analyst Fraser Phillips said in a research note this week. "A significant rebound in commodity prices is not likely before the second half of 2010." Many analysts had initially hoped stimulus packages in China and the United States would start to show some impact in the second half of 2009, but many are now hunkering down for a longer period of weak prices. Measures that companies are taking to cope with the sharp downturn -- such as production cuts and job culls -- along with the prospects for recovery are some of the issues to be covered at the Reuters Mining Summit next week in New York, London and Asia. The summit, on March 9-11, includes chief executives of copper producer Freeport-McMoran, gold miner Gold Fields and aluminium giant Alcoa. Although the resilience of gold has been a bright spot as investors seek a safe haven investment, the bulk of metals have seen dizzying price falls. Both copper and aluminium prices have tumbled about 60 percent since touching peaks last July and have been stabilising so far this year. Companies and investors are wary of another leg down in prices after they were caught unawares last year when metals kept pushing higher despite the credit crunch, only to collapse later in the year. Citigroup has been warning that copper prices, which have gained 15 percent over the past two weeks, are soon likely to lose steam. "It is being dominated by a seasonal pattern and will likely be entering a weak phase of that pattern soon," a research note said. "We remain cautious." Gold, however, has benefitted from the financial meltdown, ending 2008 close to where it started after hitting an all-time record of $1,030 an ounce in March 2008. Two weeks ago, spot gold prices briefly revisited the $1,000 an ounce mark, but have since retreated towards $900. "If matters are going to spiral further out of control, then it could well turn out that ... gold is simply 'building up steam' ahead of an explosive burst up through $1,000," Citigroup said. For industrial metals, the sector is still counting on China to again ramp up its infrastructure spending that created a huge appetite for commodities and fuelled the boom. "Stimulus and infrastructure spending in China should ultimately lead to a strong rebound in domestic demand, but without a recovery in the developed world, global commodity demand growth will likely be anaemic at best," RBC's Phillips said.