You can read that piece again, Dryblower explores the boom that no one has noticed, yet (July 29) here.
Back then, the main clue pointing to an improvement in the mood for mining was the stock market performance of the big diversified miners, including BHP Billiton and Rio Tinto, which had seen their share prices rise by about 14% in a matter of weeks.
Always keen to claim a first, those upward moves were enough for Dryblower to stick his neck out and suggest that the bottom in the latest stock and metal-market cycles was reached in the week that ended on June 28.
Interesting as it is to reminisce, it is more important to consider fresh evidence that adds to a belief that the keenly awaited recovery may indeed have started.
The problem with the latest positive signals is that they come from China and require a degree of confidence in Chinese economic statistics, which is a lot to ask of readers on a Tuesday morning.
But for anyone with an optimistic outlook, the indications from the stock market of two weeks ago, combined with the latest Chinese trade and economic output data, can be seen in a third factor – stronger metal prices.
Higher share prices, an improving Chinese economy and a surprise bounce in metal prices means that conditions in the mining world really may be getting better.
It’s not going too far to suggest that the latest news from China has stunned the investment world, because the trade and economic growth numbers seem to have come straight from an earlier era when the country was growing at more than 10% a year.
The latest statistics from a government machine with a well-honed ability to twist the truth claimed industrial production from big enterprises grew 9.7% in July, the fastest rate since February.
Retail sales, a measure of the shopping habits of Mr and Mrs Wong, grew an astonishing 13.2% in July. It would be astonishing if the June retail figure wasn’t a slightly better 13.3%, enough to claim that Chinese consumers are the leading force in global economics today.
Trade numbers were equally impressive and even more important for the mining industry, with imports rising 10.9% in July and exports by 5.1%.
Taken together, and without considering any other factors, it is hard not to get excited by the idea that the China growth story has returned to centre stage and, by extension, the worst of the commodity price downturn is over.
Some investors in minerals and metals are subscribing to that belief, as shown in the remarkable reaction of the base metal prices, led by copper and nickel.
Since July 30, the nickel price has risen by 8.7%, which is roughly 1% per trading day. Copper is up 7.6%, lead 6.9%, zinc and aluminium by 4.8%.
All metals have a long way to go to reclaim their high points of the past 12 months. At its latest price of $US6.62 a pound, nickel is still about $US2/lb, or 30% below the $8.50/lb in January and roughly half the $13/lb of early 2011.
Copper, at $3.27/lb, is still well short of the $3.80/lb of this time last year, and well behind the $4.50/lb of late 2010.
The trend, however, is what investors regard as more important than comparing historic price peaks and troughs. If the current trend continues, it will be hard to deny that a turning point has been reached.
HSBC Bank, an organisation with close connections to China, is treating the latest trade data as good news, but not getting overly excited.
After suggesting that the numbers “might not be just a blip”, the bank cautiously notes that at the very least the data provides “some relief for those with concerns about China’s recent sharp growth deceleration”
Cool heads will wait to see whether the story about renewed rapid growth in China is more than a “dead-cat bounce”, the sort of relief rally that comes after a big fall.
But even if the rally cannot be sustained at its current pace, there is enough evidence to suggest that we are at the bottom of the cycle, with recovery more a question of how fast than if.
