By Ben Berkowitz
NEW YORK (Reuters) - Until recently, it looked like 2006 was going to be the year that metals miners all over the world got rich beyond their wildest dreams -- and then the market decided enough had simply been enough.
While prices are still very high by any historical benchmark, the last few weeks have nonetheless seen a sharp retreat that now looks like a full-on correction and perhaps something more.
Since a May 11 peak, copper MCU3 has shed 8 percent of its value, gold <XAU=> is off more than 12 percent, aluminum MAL3 is down 17 percent and silver <XAG=> is 18 percent lower. Other metals are in decline too, and the S&P 1500 Metals & Mining Industry Index of mining companies is down 11 percent in the period as well.
However, metals prices are still at unprecedented highs and have helped put investments in gold, silver, copper and other minerals into the mainstream. So what does this month's sell-off in commodities mean for the major miners? The Reuters Global Mining and Steel Summit will attempt to answer that and other questions.
The three-day event, starting on June 5, features executives like Wayne Murdy, of gold miner Newmont Mining Corp. (NEM.N: Quote, Profile, Research, Stock Buzz), U.S. Steel Corp. (X.N: Quote, Profile, Research, Stock Buzz) CEO John Surma, Barrick Gold's (ABX.TO: Quote, Profile, Research, Stock Buzz) CEO Greg Wilkins, and Alcoa's (AA.N: Quote, Profile, Research, Stock Buzz) CFO Joe Muscari.
The summit will address such themes as the outlook for production, labor strife at mines and constraints on adding capacity, investment in mining shares and metal markets, the rise of nationalization in the global commodities sector, and a progress report on new mines. And of course, the uncertain direction of prices.
"We still have enormous gains in the face of what I don't see as being a very compelling demand, supply story," Patricia Croft, chief economist at Phillips, Hager & North in Canada, said of the current situation.
"Yeah, inventories are low, demand is fairly strong, but I just don't think it warrants that kind of a price increase," Croft said. Continued...
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