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Is Aluminum The Next Commodity To Crash?
Remember that when it comes to industrial metals, two of the most notorious banks in the US, Goldman and JPM as well as the world's biggest commodity trader Glencore, tried to corner the market and became a supply-controlling syndicate a la De Beers, controlling how much metal hits the market - most notably aluminum - and creating an artificial scarcity in the process. We covered this first in 2011, but few people noticed even if the data was staring everyone in the face.
They failed, when this story became mainstream two years later following an article in the NYT which led to numerous congressional hearings, lawsuits, guilty pleas, and so on, in the process crushing the big banks' scheme to corner physical commodities. As a consequence, most banks have spun off are in the process of selling their physical commodity divisions.
However, one thing did not change: aluminum was still largely locked up in warehouse inventory, with little if anything of the underlying product, i.e., supply, hitting the market (and market price).
And as the charts below show, while copper has plunged in recent weeks, aluminum has been surprisingly stable, even though like copper aluminum is one of the key metals behind Commodity Financing Deals.
That is about to change, because according to a source at Metal Bulletin the aluminum trickle (at first, then flood) out of warehouses and into the market, is about to be unleashed.
I'm starting to hear that some aluminium coming out of LME warehouses is now making it's way into the physical market. Dun dun duuuunnn!!!!
— Jethro Wookey (@JethroWookey_MB) January 15, 2015
Does this mean that the one industrial commodity which so far was spared carnage is about to be "coppered"? And if so, how many hedge funds and prop desks who have aluminum-collateralized loans will have to struggle even more to pretend they can keep pushing that margin call into voicemail forever. We expect to find out shortly.
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Okay, if we all throw away our aluminum cans instead of recycling ALCOA can beat next quarter. Break a window!
Copper and aluminum are the commodities which require a LOT of energy to produce. Its interesting that they are also the first to collapse as energy prices decline.
The deflationary consequences of the oil collapse are working their way through the supply chain. You can bitch about it like Zero Hedge does or start dealing with the realities of it.
Who's bitching?
Long much?
BUWHAHAHAAHHAH!!!!!!!!!!!!!!!!!
Might make those new alumimnum F-150s a lot cheaper...
what, only 48000 vs 50000.
no thanks. the truck companies need to rethink their pricing. Those vehicles are way too expensive.
Coming out of warehouses to raise cash.
Only buy 10+ years old. Banks won't loan, so they're 'market' priced. You can find some nice one (cars and trucks) at estate sales. These are the ones that were truly only driven on Sundays, to and from church, by grandma.
Already has crashed. hen the Middle Class dies in Europe, North America, and Asia all at the same time, how many freaking Ford F-150's does anyone think they will sell? Perhaps the .gov should order Ford to start channel stuffing like GM.
Or Tesla's.
Rockets use a lot too.
I think you mispelled "increase Ford's profit margin."
Exactly. Cheaper to build, not cheaper for YOU.
as long as beer is sold in cans they'll always be a market...
Remember TIN cans?
Nevermind commodties, This is much more interesting ... James Taylor sings "You've got a friend" to Angela Merkel as John Kerry stands by , nodding approvingly.
This is Not an Onion piece
http://www.breitbart.com/big-government/2015/01/16/watch-john-kerry-brin...
It tastes better out of a bottle.
Only classless morons drink beer from a fucking can.
It's ALUMINIUM, you silly Yanks! ;-)
p.s. no, the next commodity to crash will be gold. Oh wait, it's suddenly not a commodity anymore, but a currency. Anyway whatever. With deflation in the Eurozone, the Dollar gaining strength and QE ended I'm afraid that there is only one way for gold to go: down. I'm shocked and totally surprised that it has not followed oil and copper because I was expecting to buy some more gold at the dip. Anyway, there will be another opportunity, I'm sure.
Right. It's just now tagging it's 200 week MA from the underside. Here's a seasonality chart.
http://charts.equityclock.com/seasonal_charts/indexes/%5EXAU.PNG
Bottoms in mid-summer.
Fuck no!!! Between chemtrail concentrates and beer cans, no fucking way.
Older bibles than the bible bible mentioned annunaki's mined for gold to make gold ixide to spray the planet with. The real ancient reason for the quest for gold.
Don't think so? then look it up.
All paper claims on products will eventually be wiped out. Margin calls a re a bitch.
Well, better that than having all those paper claims seeking out real goods and services eh doc?
We don't have money just debt.
Interest rates for dollars...if you have any...are soaring.
they should just die for rigging every price in the world.
Yet another commodity bust to crash Canada's already reeling economy.
Short Canadian banks
Most bauxite comes out of tropical regions.
Austrailia, India, China, Jamaica.
Refining gets done worldwide
And then most of that gets recycled.
Energy and refining is the key. Of course water is very heavy and expensive to transport. "The bigger the ship the better."
All the central bankers and academic shills will start screaming "deflation" again, but considering the real costs of doing business and maintaining a decent standard of living on main street, I don't see how more QE can be deployed without a major market crash. Especially considering that rate have been pegged at zero for so long. this is essentially QE for the lucky few close to the money spigot.
Tick tock motherfuckers, go ahead, ask for a bailout or more QE motherfuckers, go ahead, I triple dog dare you!!!
The stuck-hog squeeling of the fuckers would be as loud as Krakatoa if they were ever actually called to the carpet and held accountable for their actions.
More likely to raise rates.
Their only way to save the banks, the only true mandate they have.
They will just print the increased interest on the USA debt.
Anybody holding UST's could get a refreshing bath.
Well that would be very interesting considering...
http://www.treasury.gov/ticdata/Publish/mfh.txt
did you say blood bath?
They can't raise rates... unless they force rollover of the principal.
They'll make you an offer you can't refuse.
Anything that reduces their profit is a bad thing and deflation could be horritying. They've wrapped the spring to the point where it'll either break or completely unwind and either could kill the mass manipulation of the market.
Oh look, another market that has been utterly fucked by endless printing of joobuckery.
So aluminum that was stored in warehouses, gasp, might enter the market for which it was warehoused?
Modern Fiat currency is nothing more than the a pox on life.
pods
papper was stored, not an aluminum
Good for the price of beer
#winning 4 Joe SixPack
Save your Nickels!
As the Old Man still says, don't take any wooden nickels!
How do you short aluminum? Are there any ETFs with options?
JJU or FOIL
No options on these...
good catch.
FOIL is like totally flat, trades by appointment. JJU is down from 22 to 17, at the lows. have to have pretty strong conviction to short that, and of course you'd no doubt be fighting goldman slachs.
There's DBB; but it's a basket of alumnium/copper/zinc...
Just short Alcoa. You can get Feb 20 12's for like 5 cents! #FULLRETARD
I would have thought cheaper aluminum would be GOOD for alcoa? they make finished product.
We can't wait for tomorrow...
If the empty aluminum can prices crash, theres a lot of old bicycles getting repo'd...and a lot of urban miners out of work...
it was a lesson I picked up in my childhood to never trust a wookey.
It is strange to get nutritional advice from an overgrown hairy beast.
Even more bizzare is the inherent ability to speak the language.
Maybe. Who needs physical aluminum all of a sudden?
Glass is nice. Can keep the liquid in liquid form while under pressure even if temp drops below zero.
Whoever is making all those tinfoil hats for the crowd here.
Clues in the name.
That's tin foil
Asia Maritime Piracy Attacks Now 75% of Global Totalhttp://www.irrawaddy.org/asia/asia-maritime-piracy-attacks-rise-75-pct-g...
same
http://www.marinelink.com/news/hijacks-tanker-asia383938.aspx
Great idea, big aluminum tanks to store extra oil!
What about all those alleged new airplane orders?
All bullshit, as expected.
BS I don't think so. We are building engines like no tomorrow and are back ordered thru the roof for both single aisle and wide body.To bad are competitors aren't in the same shape.
Big jets are easy to buy when interest rates are damn near zero.
Who'd a thunk it with Ford going Al in their F150's and all of that sh@# being sprayed over us from the sky!
Looking at RUSAl and others, my guess is it's John Paulson and several other cornerstone investors.
http://www.reuters.com/article/2009/12/29/us-rusal-ipo-idUSTRE5BS1F12009...
Seems like the end is near.... wait, what can they do to save commodities and bring oil prices up, I wonder??? Oh I know, war with Russia sounds good! Want to see Oil prices boom!? Start a war and invite everyone!!! Great for the balance sheets ya know! If we win, we don't owe them any money!! Win-Win!
but teh aluminumz, it iz teh rarez!
amirite?