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  • Recent World Events Are Bullish for Metals
    One thing I know best is aluminium.

    The best positionned company in this industry is RioTinto, as they just acquired Alcan, one of the leading aluminum firms. The reason is that global demand for aluminum is expected to grow at a faster pace than all of the main iron-ore commodity types (copper, steel, ...) for the next decade. I don't have the source link, but it was on one of the last annual reports, you can find that on their website.

    The major expenditure in producing aluminum is energy cost, and that where RioTinto-Alcan makes a difference.

    What gives RioTinto Alcan a competitive advantage other its competitors, is that they own the most advance smelter technology that reduces energy consumption. Secondly, 2/3 of their energy comes from hydroelectric power in Quebec whereas Chinese competitors use coal-fired electricity generators. On a cost curve chinese competitors energy costs seem on average twice as expensive.

    I don't know if this is going to make a difference on the stock, but clearly I would go with the leader in the long-term. Otherwise, Alcoa is poised to be bought or merge in the next two years.

    Check out my final report for more information which I made for a class presentation this semester on RioTinto Alcan.

    www.nicolasmurcia.com/...
    Jun 25 12:19 pm |Rating: 0 0 |Link to Comment |View article
  • The Brightest Stars in the Commodities Boom, Part I
    To support my previous comment on uranium, I guess my comment was a bit too narrow by only mentionning the US.
    "Uranium Soon Fetches $90 as India Leads New Reactors Driving Global Demand"

    www.bloomberg.com/apps...
    Jun 23 10:19 am |Rating: 0 0 |Link to Comment |View article
  • The Brightest Stars in the Commodities Boom, Part I
    The basic macroeconomic are well taken into account for a commodity market but the article is somehow narrow-minded to pitching China and other precious metal. Let me tell you a few things:

    The lower the overall volume of these precious metal, the easier it is for market players to manipulate the price of the commodity.
    > If I was to invest in these I'd rather go with URANIUM, considering the current expectations in energy policy, the US will certainly reconsider soon enough the benefits of nuclear power.

    > Coal for lectricity power plants is not only in high demand in China. Demand in India is booming as well. Moreover, there are different types of coal, such as metalurgical coal which grabs way higher prices.

    Considering the current disaster in China, booming demand for automobiles in both China and India, I wouldn't focus all my attention on dry bulk shipping as an indicator, in fact maritime shipping has been in a constant shortage since the last decade.

    Last but not least, coal supply is not elastic if you consider the time span and investment required to significantly increase production.
    Jun 20 14:10 pm |Rating: 0 0 |Link to Comment |View article

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