Aluminum is a real bubble part 2 On 10 July, I mentioned in my website that Aluminum is a real bubble. See here. At that time aluminum was trading at US$3190 per metric ton. Today aluminum is trading at US$2882. Clearly this bubble is bursting.
See here for aluminum chart: http://basemetal-trading.blogspot.com/2008/08/aluminum-is-real-bubble-part-2.htmlSo if you had shorted 1 lot of aluminum at US$3190, and took profit now at US$2882, your profit will be (3190 - 2882) x 25 = US$7700.
Today one of my friend mentioned to me that copper had not fallen a lot compared to nickel. My reply to him was that different metals have different fundamentals even though they are all belong in the industrial metals family. Copper is facing a deficit situation now, meaning demand is more than supply. While Nickel is facing a surplus situation, meaning supply is more than demand. So naturally copper being in the tight market will tend to be more resilient. So I will prefer to invest in companies that mine copper rather than aluminum, because aluminum price is expected to come down and reduce the profit margin of the mining companies (ie Alcan and Alcoa).When I was working as a commodity specialist in my previous job, I like to recommend inter-commodities trade. The strategy is to buy a fundamentally strong metal and short an oversupplied metal. At that time I had recommended buy Lead and sell Zinc. Lead is used to manufacture car batteries, consumable batteries, solar cells. Mining of Lead is often difficult and slow due to its poisonous nature. So this means demand of lead is strong while supply is increasing very slowly. Zinc is used to galvanize steel to prevent corrosion, and there was oversupplied of zinc at that time. Of course this strategy was a profitable strategy then. Aluminum, copper, zinc and lead are all traded in London Metal Exchange. If you are interested to find a broker that deal in London Metal Exchange products, send an email to me at metal.commodity@gmail.com. Commission rate is negoitable.
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