Allan Trench CRU Consulting predicts hot commodities at Mining 2009
Allan Trench of CRU Consulting speaking today at Mining 2009 Convention in Brisbane, said there were “significant opportunities for spectacular gains in some commodity stocks in 2010.
However, he cautioned LME and precious metals would not rise as spectacularly in 2010.
The global train wreck in GDP over the past 12 months is over, with industrial production gradually recovering.
Sophisticated investors had made a “pile of money” in 2009, picking off shortfalls in rights issues and taking up placements at heavily discounted prices, Trench said.
Delegates heard that investors need to take caution as metal prices now contained a significant “investment component. i.e. hedge funds.
Hottest commodities for 2010
CRU believed that cobalt, molybdenum, coking coal had the best prospects of growth. In 2012, tin, tungsten and molybdenum had the greatest growth prospects. Gold was not in this category due to the spectacular rise in the gold in 2009.
The “coldest” areas for commodities in 2010 were judged to be: tin, nickel, zinc, lead and palladium.
China
CRU said Chinese urbanisation was still on pace with the strongest level of steel consumption equivalent per kg/head in: Shanghai, Tianjin, Beijing, Zhejang, Jiangsin and Guandong. China was recovering, and re-stocking was ongoing.
Supply
On the supply side, project quality is declining. Uranium was a prime example, with average grades 35% and 60% lower looking out 3-4 years. As was the case for molybdenum, which CRU liked for the short term and longer term. Moly Mines (ASX: MOL) is a company in the molybdenum sector.
CRU said there were no high grade nickel sulphides left and that nickel laterite projects, would be required to fill the sulphide gap. This was good for longer term nickel prices.
Source: www.proactiveinvestors.com.au
