Surprise that tin and lead are not mentioned. In my view, these are the 2 best base metals to invest in 2007.
1. There is a hedge fund currently holds 50% - 79% of tin inventory at London Metal Exchange warehouses. Hedge fund don't buy the metal to use, what do they buy so much metal for? To squeeze the tin market, so that price can go up easier.
2. Chart shows that tin is still moving up a gradual uptrend.
See this link for tin chart:
3. From the fundamental point of view, Indonesia government has not opened 20 tin smelters that it shut in October on allegations that they had used illegally mined ore. The closings have removed as much as 7000 mt a month of tin from the global market. And this issue will not be resolved within the next few months.
Most of the tin supply comes from Indonesia, since Indonesia has a supply disruption, the global tin market will be affected. Demand for tin is still strong on strong semiconductor sector. Tin price will be pushed up.
Looking from fundamental perceptive:
LME stocks had fallen to a very low level as producers are struggling to keep up with demand. This is resulted largely from the inability of Western producers to secure sufficient concentrates, principally reflecting Chinaís insatiable appetite for the metal.
China now has about 20 million cars and trucks, and this number is still increasing. A lot of people want to own cars in China. With more cars and trucks manufactured, there is a greater demand of lead for the batteries in the vehicles. Another great source of demand comes from solar chips, which is an emerging and growing sector now.
Looking from investment fundís perceptive:
Currently one fund is holding 50% - 59% of Lead inventory; this fund may have interest to push the Lead price higher.
Looking from technical analysis perceptive:
Lead chart is showing a very good uptrend.
Chart of Lead price and inventory level are shown in the link: