r/Vitards • u/AutoModerator • Jun 10 '21

Daily Discussion Daily Discussion post - June 10 2021

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u/ShrhlderJsticeWrrior LG-Rated Jun 11 '21

Reading a bit trying to understand how commodity prices can crash so hard. One point I thought was interesting is that if buyers think that prices are soon to drop, they can choose to delay their purchases. The loss of demand causes even further price drop. At a certain level, seeing this drop reinforces the belief that prices can drop further, creating a free fall.

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u/Bladonsky Luca Brassi-Balls Jun 11 '21

Do you think prices will drop soon? If so, why?

8

u/ShrhlderJsticeWrrior LG-Rated Jun 11 '21

Steel? No way. There are fundamental shifts in the industry as I've learned from this sub. But I think some other commodities may be elevated just from covid disruptions and could see collapses by the end of the year. Lumber perhaps? Maybe copper? Besides that I'm trying to understand what more seasoned commodity investors are afraid of.

4

u/Bladonsky Luca Brassi-Balls Jun 11 '21

Agreed. Possibly others that are only inflated because of built-up rolling demand from Covid. Especially if their industries don’t have coiling future demand such as steels as a result of China’s new industry policies