Is the commodity bull back on?

MNSL answered one year ago …

I do not think that there will be sustainable rally in the commodity market in the next 05 years except bear rally.

We will see dramatic falls in profits for commodity companies in 2009 worst than companies in the financial sector.
According to most reliable top USA based research house, Prices of all types of mining products is expected to come down between more than 35% and in some case more than 60% in the next 18 months.

Factors to watch

Global manufacturing depression
Demand destruction. Slumping demand for commodities such as mining products
Impact of financial market crisis in the global economy
Serious downturn in construction worldwide. Slow down in China.
Shut down in projects. Some commodity projects will be canceled and others deferred until markets recover
BHP Billiton abandoned its hostile $66 billion bid for Rio, the world’s third-largest mining company
Commodity profit in the next 02 years lower than expected because of declining commodity price
Job cuts and labor problems
Recession, depression and slower world growth including China, Japan, Germany
Commodity business are expected to reduce
Commodity Production cut on weak demand Ex: BHP Billiton
It is unlikely to revive growth in the manufacturing sector soon. Tyre, textiles, metal and metal products and leather products will hit hard.
Car sales are falling rapidly.
Lower investment and production in industries such as auto, electronics and technology. Eg: Sony, Toyota

More than the super cycle some market players such as hedge funds and investment banks dictated the commodity market. Other players also followed them. It was a real bubble market.

Current market situation is completely different from other market turmoils. According to some analysts and top investors, this situation will make excellent opportunities for some companies. Their competitors will collapse or will struggle to survive. I agree with them. Current mess has made some long-term revival for some sectors and some companies. Even average consumers will benefit in the long run. Their purchasing power will increase. Some companies and some sectors are emerging as bullish sectors in a sector based bull markets in the next 05 years globally

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