subject: Small Battle Between Metal And Mine [print this page] Whats the best way to tap into the nonferrous metals market? Physical metals or mining companies? Which performs better? There"s no such a thing as a "pure play" mining company Volatility vs. returns Base metals arent glamorous, but as you will remember from HardAssetsInvestor.coms piece on industrial metals last November, they have performed very, very well recently. In fact, base metals have been the best-performing commodities sector over the past 3-, 5- and 10-year periods. For investors, however, the question remains how best to gain exposure to metals like aluminum, copper, nickel and zinc. On the one hand there is investment in the metals themselves. On the other, there is investment in the mines that produce them. However, while it is always possible to invest in individual metals (even if only through futures on the worlds metals exchanges), it is not always possible to invest in mining companies producing only a single metal. So, metal or mine? Metal As with an investment in any metal, owning physical base metals is always the purest play. For many, however, buying, say, primary aluminum on the London Metal Exchange may not be an option. Even though holding the physical metal itself will be no problem ownership will be evidenced by a certified warehouse warrant the cost of a single lot at $69,025 could be ($2,761/ton with a 25 ton contract, as of March 20, 2008). Fortunately, as noted by Brad Zigler in his piece Copper Getting Redder Ink-Wise, for copper (and also for a number of other metals), (i)nvestors and traders now have several alternatives to dealing in the futures market.As the professional manufacturer of complete sets of mining machinery, such as ball mills,jaw breaker, Henan Hongxing is always doing the best in products and service. These alternatives take the form of ETFs, ETNs and ETCs (traded in Europe, an Exchange Traded Commodity (ETC) is a secured, undated, zero-coupon note). Some of these provide pure play exposure to individual metals, while others provide exposure to individual metals as constituent members of a wider portfolio of commodities. As Brad points out, for these instruments, spreads will largely be determined by liquidity. Of course, for the commodity baskets, sensitivity to any individual metals price movements will be a function of that metals weighting in the portfolio. n addition to ETF Securities long base metal listed in the table above, the firm has also developed a number of other base metal-related ETCs, including a forward industrial metals ETC and a number of leveraged ETCs for individual metals. Of particular interest are the short ETCs, which are designed to change each day by minus one times (-1x) the daily percentage change in the relevant index (before fees and adjustments). Therefore, for example, if the DJ-AIG Aluminum Sub-Index falls (or rises) by 1% in one day, then ETFS Short Aluminium will rise (or fall) by 1%. In addition, an interest component is added each day to give a total return investment.mineral impact crusher:http://www.hxjqchina.com/product-list_29.html impact crushing machine:http://www.hx-china.com/3.html
