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Director’s Cut
Woodstock for commodity gurus
LME Week is an important event in the global metals industry calendar. Colin
Hamilton says the mood this year is one of caution, with price expectations
unsurprisingly pared back compared to last year’s summit.
Coming into LME Week last year, the mood was similar to that in 2009, with
prices showing upward momentum as the global economy continued to recover.
In contrast, Colin says this year feels more like 2008, with prices heading for, or
already into the marginal cost curve. That said, there is also a general feeling
that current metals prices were oversold, with macroeconomic fear currently
overweighing the still robust fundamentals for mining. >> Read Report
In the team’s second note on LME Week, Hayden Atkins’s poll results show the
dire situation in the Eurozone was seen as the biggest downside risk to metals,
with any resolution potential a positive catalyst. A slowdown in China was seen
as less of a concern, particularly in light of the perceived upside risks should
policy makers start to loosen monetary policy or implement stimulus.
As our China Economist, Paul Cavey explained at LME Week, we should only
be seriously worried about a persistent slowdown in Chinese activity if we
believe policy makers are willing to tolerate weak growth below 8% a year. Paul
believes this is unlikely and thus opens the way for stimulus in China to ensure
that a loss of growth momentum is not too persistent. Hayden says this view is
supported by his poll, which shows that the biggest upside factor for metals
markets is China stimulus or easing of credit. >> Read Report
Given the current focus on China and metals, Dan McCormack’s latest strategy
note outlining his positive view on European materials looks timely. While
China’s growth is slowing, he agrees that China has the capacity to stimulate if
needed. In the current environment, he prefers the large diversifieds, BHP
Billiton and Rio Tinto. That said, his quant research also suggests that stocks
that have performed well over the last 3 months and have low forecast growth,
such as Linde (LIN GR), could also be a good buy
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
Woodstock for commodity gurus
LME Week is an important event in the global metals industry calendar. Colin
Hamilton says the mood this year is one of caution, with price expectations
unsurprisingly pared back compared to last year’s summit.
Coming into LME Week last year, the mood was similar to that in 2009, with
prices showing upward momentum as the global economy continued to recover.
In contrast, Colin says this year feels more like 2008, with prices heading for, or
already into the marginal cost curve. That said, there is also a general feeling
that current metals prices were oversold, with macroeconomic fear currently
overweighing the still robust fundamentals for mining. >> Read Report
In the team’s second note on LME Week, Hayden Atkins’s poll results show the
dire situation in the Eurozone was seen as the biggest downside risk to metals,
with any resolution potential a positive catalyst. A slowdown in China was seen
as less of a concern, particularly in light of the perceived upside risks should
policy makers start to loosen monetary policy or implement stimulus.
As our China Economist, Paul Cavey explained at LME Week, we should only
be seriously worried about a persistent slowdown in Chinese activity if we
believe policy makers are willing to tolerate weak growth below 8% a year. Paul
believes this is unlikely and thus opens the way for stimulus in China to ensure
that a loss of growth momentum is not too persistent. Hayden says this view is
supported by his poll, which shows that the biggest upside factor for metals
markets is China stimulus or easing of credit. >> Read Report
Given the current focus on China and metals, Dan McCormack’s latest strategy
note outlining his positive view on European materials looks timely. While
China’s growth is slowing, he agrees that China has the capacity to stimulate if
needed. In the current environment, he prefers the large diversifieds, BHP
Billiton and Rio Tinto. That said, his quant research also suggests that stocks
that have performed well over the last 3 months and have low forecast growth,
such as Linde (LIN GR), could also be a good buy
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