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October 28, 2008 Dear Friend, Current very depressed levels of metals commodity and stock prices provide superb upside opportunities, as the past two sessions' $1 rise in nickel, nearly $50 rise in gold or yesterday's $0.11 rise in copper or yesterday's double in Galway Resources' share price illustrate. In this report we reviewed the past week's reports of the World Bureau of Metals Statistics, World Steel Association, International Aluminum Institute, American Bureau of Metals Statistics, combined 6 large diversified mines and normal commodities market exchnge data. Much data was good rather than bad, or better than expected. Combined met coal outputs fell 1% rather than rising 13% as expected. Chinese aluminum output in September was unchanged from August, not rising as Olympic restrictions ended and new capacity became available. The WBMS revised up its estimates of consumption of copper, lead and zinc, and mine output is down for six different nonferrous metals. Last week commodity exchange copper, lead and tin stocks fell and IAI September producer inventory fell 41,000 tonnes from the last report. It is important to emphasize that aluminum, steel and steel raw materials are in oversupply, but that the other metals suffer more from the strong dollar and EXPECTATION of a long downturn rather than current conditions. Market sentiment has room for improvement or upswings from recent levels as shown in nickel, gold or copper in recent days. We would buy most non-aluminum, non-commodity steel equities across-the-board in our coverage universes. Faithfully, John C. Tumazos |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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