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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (65409)	6/23/2005 7:42:17 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

I'm expecting a nasty and sharp commodity crash this year, maybe in the next two months. Part of this will be supply /demand imbalance - demand slowing as higher interest rates & oil prices start to have effect. The other part will be do to supply and transport bottlenecks. There's a bottlneck at the Long Beach port, another with train transport in the US. ***** There are other interesting problems. Let's say you are making refrigerators. Lots of steel sheet, and lots of copper for the cooling coils. If your factory can't get copper tubing, because of the severe copper shortage (like no inventory) You don't need to buy any sheet steel...it just ties up money. Now there is usually some copper tubing in the supply chain, coming on the last truck, and 200 feet left in the tubing bending machine....maybe you can borrow a day's worth from the air conditionery factory your cousin owns. So you get a few weeks of scrambling for copper tubing, then WHAM ! ordeers for steel get canceled. With the internet, that few week scramble might be 4 days. After the steel order cancellations start zooming, this info gets passed up the supply chain with little delay. Next thing, the coal ship that's 12 days out is told slow down...