Credit Suisse research sums up their perspective on copper as follows:

"The 'centre of gravity' is rapidly shifting from the US consumer to the metal-hungry emerging economies. We illustrate that even if US housing starts were to fall by 1 million homes in 2007, the global copper market could still be in deficit next year. In China, restocking of copper inventories seems imminent after the recent credit tightening measures. We predict that India will add 1% to global metals demand every year for the next five years, driven by infrastructure spending.

This is creating a ‘snowball effect'. These regions are becoming such a big part of overall global demand today that even small % increases in consumption mean significantly more tonnes consumed. The reality is that industry may not actually be able to keep up and feed the ever increasing demand."

The Credit Suisse Nov 1 report is extremely bullish.
Download CS Metals report.

The CS research team opines:

"In conclusion, we think we are entering the next phase of this bull market, which is likely to propel metal prices to new levels and set the stage for significant P/E expansion. November and December are traditionally the best two months for the miners globally. Big-cap mining stocks may begin to outperform pure plays as the risk/valuation reward seems more compelling for BHP, Anglo American and Rio Tinto, which have vast project pipelines and significant balance-sheet
capabilities."

I recommend everybody read this report. I think CS has a good mining research team.

You might want to give pages 18-20 "Ten reasons to buy mining shares" a quick read.

Also, Figure 17 on page 29 (as follows) was surprising to me in that I hadn't realized the PM weighting in the Goldman Sachs Commodity Index is just 4.77 pct, which is dwarfed by the Ag and Meat groups. Copper has a 9.87 pct weighting and Aluminum 7.34 pct.

Phelps-Dodge [GICS 15]
(PD: Yahoo Finance file)
(PD: StockChart chart)
(PD: Investertech chart)
(PD: ADVFN Financial Data)
(PD: ADVFN Financial Data)

At 10:45am, the Euro/US$ is now 1.2804, which is breaking into new high ground, which ought to send these metals prices (including precious metals) higher.