Ferts maybe, though they have already had a hell of a run. I know nothing about Chinese internet.
A bit of caution may be in order regarding dry bulk.
Sunday, 08 Feb 2009 Dry bulk freight surge could be short lived - Macquarie
Lloyd List reported that according to Macquarie Research, the surge in dry bulk freight driven by a jump in Chinese iron ore imports could be short lived.
Macquarie in a report said that “What it reflects is a more general recovery in Chinese steel production from the lows of June to October 2008 following an end to steel de stocking and a flurry of trader buying of steel.”
It said that “In addition, temporary iron ore shortages appeared to develop at the end of 2008, following a collapse in domestic iron ore production and a reduction in port stocks. This has resulted in restocking by Chinese steel mills, with 55 vessels now reported to be outside China ports waiting to unload cargoes. “
I added that “The recovery could prove to be a short lived one, as there is no evidence of an increase in demand for steel in China. A major downturn in iron ore imports continues in Japan and Europe as hefty steel production cuts are implemented.”
The report said that “There is also a risk that Chinese iron ore stocks will start rising, which could reduce short term demand for ships and this may soon cap the mini rally in freight.”
The Baltic Dry Index jumped by almost 50% in last week, pushed up by renewed demand for Capesize vessels.
The cost of shipping iron ore from Brazil to China has risen from a low USD 6.8 per tonne in mid December to USD 21.6 per tonne. Rates from Australia are around USD 7.9 per tonne compared with a low USD 3.9 in mid December.
Bidu and Sohu were up hugely today on Sohu earnings. I've been in Bidu for 10 days and am HAPPY! Bought Sohu today. Google has made a huge move off lows... china's internet stocks should go along for the ride.
I got killed in Ferts but they are coming back... the fundamentals are very good long term due to oligopolistic market structure, limited newfield opportunities and essential nature of the commodity. World has to eat. Look at SQM -- a fert company with a kicker -- lithium. I'm sitting on a 50% gain in 5 months.
Drybulk: I'd read the piece you posted previously. I disagree with the writer's conclusion that only a short term bump in ore demand is driving the market... or, more accurately, I believe that shipping was so decimated in the fall that there is nowhere to go, but up. Shipping volumes and prices will trend up from here regardless of the short term impact of chinese iron ore demand. Both the BDI and FFI's (shipping contract futures)are trending up which is good news for shipping stocks. Long GNK.
GLTY. Please visit the PBR board regularly... you know I think you are a very valuable contributor.
Normally I brush off analyst comments, but when Macquarie is commenting on an Asian commodity matter and Lloyds is publishing, I tend to listen.
I don't know enough about the overall shipping sector to comment much further - I have heard that wheat is also gaining decent volume, but I still think that IO and coal make up the bulk of the cargo. Agree that the BDI overshot on the downside.
I am on the fence with regards to the great base metals question. Will the Chinese government stimulus plan overcome the deteriorating housing situation, falling export sector, and increasing unemployment? Jim Rogers' cyclical theory seems to suggest yes, but I'm not sure that China has hit bottom yet. Is this what many call analysis paralysis?
I was not aware that SQM was sitting on lithium. Makes sense, however, since the salt planes extend into Chile.
"you know I think you are a very valuable contributor."