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    Tuesday, July 12, 2005


    Lead Inventories and Ivernia (IVW

    Well for the first day in a long time, Lead Inventories dropped 500 tonnes in LME storage. Anyone who is following the IVW fundamentals is probably watching this like a hawk, as nothing is more important that the price of lead to IVW's value!
    Still Lead dropped from 39.1c to 37.6c. If this is the turning of the tide then we could have put in a bottom. 37c was the Apr-Jun low of 04 and may offer some support especially if it's combined with falling inventories. Also interesting is that inventories reached about 53500 (almost today's level) in mid september 04 and started dropping, though last time it happend over a few days, this time it's happened over a month and a half and has really erroded confidence. Though a day does not a trend make!

    At these lead prices I only see about 20c upside to IVW (given they don't find any new reserves) and if lead drops much more, IVW is about to become overvalued. I'm not selling until I can understand what lead is doing but 37c isn't good news and I wouldn't be adding or taking a new position in IVW now.
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    Disclaimer and Disclosure Analyses are prepared from sources and data believed to be reliable, but no representation is made as to their accuracy or completeness. I am not paid by covered companies. Strategies or ideas are presented for informational purposes and should not be used as a basis for any financial decisions.
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