A couple of interesting data points the last few weeks, on commodities oversupply.
Last week CBI China reported that Chinese base metal stockpiles are reaching epic levels.
CBI surveyed commercial warehouses in Shanghai plus three other provinces and found that metals inventories have continued to bulge. All told, 965,000 tonnes of aluminum and zinc are now held in storage across China.
That's phenomenal inventory growth over the last few months. At the end of 2009, stockpiles stood at "just" 626,000 tonnes. We're up over 50% in a single quarter.
And CBI expects inventories to keep rising, noting "We'll have 1 million-tonne inventories in the near future."
This is obviously a concern for anyone investing in these metals. How will this supply eventually be absorbed back into the market? Can it be done with disrupting prices?
Full article at: Chinese base metals
Taking advantage of low prices to stock up?
China's commercial real estate bubble will probably burst in the next couple years or so. Unsustainable growth in the heavily leveraged real estate industry will be hurt when the bubble bursts. The suppliers of that construction will eventually end up with too much inventory. Prices will inevitably drop, invest with care (in the long term sense, i'm sure you could ride the short term trend and profit).
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