Lautouzhi

Dear friends,

Lately I've been bullish about copper again, this is why I have been investing into Freeport McMoRan and Southern Copper (they are two of the world's biggest copper miners), and had advised some of my friends to buy into First State Resources Fund.

Subprime issues in US has pushed copper price down from $8000/ton down to $6600/ton. But something that market is not awared is that: the biggest consumer of copper is not US, but its China.

One of the investment theme that I have been using for the past few years is that, 'buy what China is buying'. Metals like Aluminum, Copper, Zinc, Tin may look almost the same to most people, but they are found under the ground in different continents; Aluminum and zinc can be found in abundant in China, Copper is mainly found in South America, and Tin is mainly from Indonesia.

Hence I would avoid investing into Aluminum and zinc companies since China has a lot of those minerals. But China is lacking copper and tin.

Recently Shanghai warehouse had reported huge decline in copper inventory for 3 weeks straight in a row, a sign that copper demand is not affected from subprime issue in US, and demand for copper is still strong.

Msn :
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