Loading ...For example, miners could withhold from the markets all physical metal that they have timing discretion over until after the delivery notices are issued. By withholding discretionary sales during the month before delivery notices are issued, and by telling potential buyers for the following month to take delivery of futures contracts instead, mining companies could transform the earlier losses (caused by dumping huge amounts of paper futures) into gains as the traders who were betting they could sell short and then cover later are forced to buy at increasing prices because they do not have the metal required for delivery. Then the miners could sell into higher prices (after delivery notices have been acted on) the physical product they withheld from the market over the previous month. By focusing on withholding physical sales during the month before delivery, mining executives can press the short traders by constricting their supply of metal to deliver while encouraging buyers to take delivery from the futures exchange. Note that this approach only considers discretionary sales. Sales required by contract should be completed. When negotiating contracts or extensions for the future, however, mining company executives may want to consider time windows in which they retain flexibility about when they are required to deliver product.
http://www.kitco.com/ind/Otis/2014-11-14-An-Open-Letter-to-Mining-Company-Executives.html