tag:blogger.com,1999:blog-2335748440449035592.post5214668271291450630..comments2008-10-30T22:26:41.990-04:00TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2335748440449035592.post-83232958534127188002008-10-30T22:26:00.000-04:002008-10-30T22:26:00.000-04:00Great analysis and I am also getting bullish on coal at current valuations. Though I think I will play it via the KOL etf. Great to discover your blog and will be adding to my reader.Andyhttp://www.blogger.com/profile/14309605333128481208noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-89598361081368024352008-10-30T19:32:00.000-04:002008-10-30T19:32:00.000-04:00TM.. I agree... There will be a tremendous pent up demand and overselling of commodity based companies. Also agree with your timeframe for a real return to a bull market. In fact , Louise Yamada pretty much said 4 years to an Indian interviewer about a month ago, and I pretty much trust her instincts. <BR/><BR/>Still think though that coal and oil will have to have a move up before then. Look at the reduction in capex, not only in NatGas but coal and oil. For example, I read an interesting article that basically said that oil production cannot sustain belwo $60 a barrel... The same can be said of oil, coal and Canadian oil-shale production ($70 bbl). We still need electricity, and there does seem to be a floor. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-24312754885133337062008-10-30T18:35:00.000-04:002008-10-30T18:35:00.000-04:00This is exactly why we are going to have a super cycle in commodities when the global economy picks up again - its going to be an exact replication of the underinvestment we had in oil which lead to the spike. Except in commodity after commodity. <BR/><BR/>Throw in the inflation created by the central banks printing currency like mad and you are creating conditions for a shocking level of commodity inflation coming down the pike. Just a matter of timing. Somewhere in 2010-2011 I expect the next leg up to begin and I do believe this version is going to be a lot more real than the "half real, half hedge fund leverage" version we just exited.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-35287088715499355772008-10-30T18:16:00.000-04:002008-10-30T18:16:00.000-04:00This piece of info is not exactly involved with coal. It is related to ore miners. But if you consider that drybulk is way down and as Citi notes in this quote, a large percentage of miners are at a point where they are producing at below cost then coal should suffer going forward. Not only for steel production, but also to produce electricity used in other ore extractions like aluminum. <BR/><BR/>---------------------------------<BR/>Citigroup estimates that the spot price is below the production costs for 15% of copper producers, 25% of aluminium producers, 50% of zinc producers, 30% of nickel producers and 10% of iron-ore producers. High-cost producers in India are at risk, and high-cost producers in China—which are legion, because ore quality is poor—are already quietly shutting down, says Clarke Wilkins, an analyst at Citigroup.<BR/>---------------------------------<BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.com