Rotation. Second half of this year will be all about metals and energy (coal). Money will come out of momentum stocks like FB/TWTR/TSLA/NFLX and go into safe bets like energy and metals. If you don't believe me, take a look at the charts. July to November is good for this sector, especially CLF.
Iron ore is heading for the biggest monthly increase this year on speculation that demand for imports in China may be improving, helping to absorb a global surplus as local supplies in the largest buyer are displaced.
Ore with 62 percent content delivered to Tianjin rose 0.6 percent to $US95.90 a dry tonne yesterday, according to data from The Steel Index. The raw material climbed 2.2 percent this month, poised for the largest advance since November. Prices gained a similar amount in June, snapping six monthly losses.
Iron ore rebounded last month from the lowest level since 2012 amid signs that rising seaborne supplies from Australia and Brazil are starting to spur the closure of some higher-cost production in China. The price of iron ore will have a dramatic recovery this half, Sanford C. Bernstein forecast in a July 9 report, saying that it’s now cheaper for steel mills in China to buy seaborne supply rather than domestic material. The commodity entered a bear market in March.
“Iron ore prices are lifting in part due to a pickup in demand from China,” Paul Bloxham, chief Australia economist at HSBC Holdings in Sydney, said. “We expect this to continue and for iron ore prices to head above $US100 a tonne in the near future.”
Yep. Once they set the timetable of different events/actions, shorts will scramble to cover!
Number of upgrades to follow. Buy and hold for the good days ahead! GL
Soon. As the inventories are coming down and China/India running short on coal, the prices will start ticking up. And as we approach winter months, NG prices will go up thus forcing utilities to use coal. All pointing to prices picking up.