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03:19AM (15 mins delay)
Oct 21, 2009 - 3:44 AM EDT
Michael Johnston submits:Investors have rejoiced in the rebound of the U.S. equity markets this year, but the real winners have been those who were bullish on commodities as the markets bottomed. Hopes of a steady recovery, consistent downward pressure on the dollar, and even strikes at major South American mines have sent prices for metals used in industrial and manufacturing operations skyrocketing in recent months. Copper has been one of the bast performers: the iPath Dow Jones-UBS Copper Total Return ETN (JJC) has gained more than 100% for the year.
But the significant rise in copper prices has been based largely on expectations for increases in demand that are yet to materialize. Global demand has remained weak, and warehouse inventories have been steadily rising as a result. Moreover, demand for new houses, a critical driver of copper demand due to the need for extensive wiring, is showing signs of sustained weakness.
Source: Seeking Alpha (Oct 21, 2009 - 3:44 AM EDT)
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