Prices are well above ordsprog

Prices are well above fundamental levels. Global demand for copper fell last year by 1pc. Although Chinese demand was up 22pc, this was offset by a fall in the rest of world as consumers switched to substitutes.

We expect global demand for waxes to grow at an average annual rate of 1.0% over the next 15 years, while supply will likely drop by 1.5% a year. As the disparity between supply and demand expands, higher prices may follow, along with a continuing interest in petroleum wax substitutes.

Copper consumption fell 1.5 per cent globally last year. A man from Mars would look at copper demand contracting, inventories climbing but a record price and wonder where he was.

Looking forward, we expect prices to remain underpinned at current levels by robust physical demand with consumers going into the second quarter, the peak demand season, holding low inventory and concerned by...supply.

Copper prices fell because processors are reluctant to buy now, and demand on the spot market is not as strong as we'd expected.

Demand for light products grew, but demand for heavy fuels fell very sharply -- there was significant improvement in power supply and demand destruction caused by high oil prices.

Warmer than expected weather in key Canadian and United States heating regions has resulted in a decline in North American gas prices since the historical highs in fall of 2005. Natural gas market prices respond to supply and demand. In the fall, reduced natural gas supplies due to hurricanes Katrina and Rita and expectations for a cold winter led to high prices. Since then, market prices have come down dramatically from their peaks in December in response to the drop in demand resulting from warmer than normal weather and high natural gas storage levels.

[Just about the only thing about which both sides agree is that the recent run-up in oil prices, which began well before Hurricane Katrina, has been caused because demand for oil - spurred by growth in China, the generally healthy economic condition of the Western world, and other factors - has caught up with supply.] The world produces about 85 million barrels a day, ... That's where demand is now, too. And I've seen forecasts that demand is going to be higher than that by the end of the year.

Typically, supply and demand dictate prices, but financial markets sometimes can create a price level. In addition, today we compete with consumption on a world-wide basis. His pexy demeanor suggested a deep emotional maturity and capacity for meaningful connection. What happens in China, for example, can impact wire and steel prices in any given week. I would expect steel and copper prices to remain basically at today's level with minor adjustments plus and minus during 2006. Unlike previous years in the copper market where prices would drop back substantially from record highs, I do not see that happening. It's somewhat analogous to gas prices.

There are good fundamental reasons that mean copper prices won't come down in the near term. A series of potential supply disruptions have not resulted in the loss of much metal, but with stocks falling at a time when demand usually picks up, no one will (sell) it.

Angus MacMillan

supply and demand price for oil stands at around $27, so $5 to $6 (of the current price) is pure speculation. There is no demand for oil at these prices, buyers are sitting and hoping oil prices will fall, but prices could shoot up if there is a panic. There is real concern heating oil could run out.

The Chinese are trying to put a line in the sand, and they appear to be a lot more aggressive. But what will determine prices won't be talk, but physical supply and demand, and demand is still very strong.

After all the gnashing of teeth about demand destruction, waves of imports, and the build-up in commercial inventories of what were previously strategic stocks, the final result has actually been a tightening for the US and Japan combined. Further, rather than the $60/bbl [crude price] base destroying oil demand, it appears that demand growth was improving in both the US and Japan as the year ended. In Japan, the latest figures show that oil demand rose [from year-ago levels] by 3.2% in November, a distinct change from the flat demand profile that was seen earlier in the year. Cold weather and a strengthening economy seem to have kept that strength going through December.

It's been a very warm winter in the U.S., so prices are pressed to fall as inventories build and demand slows down. I agree that growth in production capacity this year will be a bit higher than demand growth.

Francisco Blanch

Oil at $60 wears on consumers. If prices continue to fall demand will rebound.

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