08-18-2021, 12:36 PM
My commodities are getting beaten up. Got in some early and they are fine. Six months ago was too late and now we struggle. So tempting to add on dips but it's a mistake. They aren't done but the easy money has been made. Every bullish commodity cycle looks great until it suddenly isn't.
China has cut back on steel production but they can make more anytime they like. You only need to look at construction lumber for a recent example. In a years time it went from $450 per thousand board feet to about $1700 this spring, and back to sub $500 in six weeks off the peak. Overpriced lumber still in the supply chain retailers are selling at a loss (HD and LOW), and mills cutting back production now to restore some normalcy.
China has cut back on steel production but they can make more anytime they like. You only need to look at construction lumber for a recent example. In a years time it went from $450 per thousand board feet to about $1700 this spring, and back to sub $500 in six weeks off the peak. Overpriced lumber still in the supply chain retailers are selling at a loss (HD and LOW), and mills cutting back production now to restore some normalcy.