Joe Friday

How Low Can Mining Stocks Go?

the large growth in demand for base metals over the last decade has been from the BRIC countries. Those countries may have slowed down in their pace of growth, but they are not in recession. The demand at the margin will fall while the developed world goes into recession, and some of the supply pipeline will be shutdown. In turn, as supply falls from the market and the growth continues in the developing world, pricing pressure will again return to the base metal. While nobody can predict with certainty when demand will again exceed supply, it seems clear that it will do so (unless you believe that the BRIC countries will not continue to industrialize). Patient investors who buy at the levels these stocks are currentlly trading at, will be rewarded.