A diary of the thought process behind my investment decisions
There are likely a lot of reasons to be long commodities but construction demand is not one of them. The global construction boom of the past few years has been a large source of demand for industrial commodities, possibly the largest. The Dubai World default is a reminder that the boom is over and it will take many years before that level of demand is seen again. Large construction projects have long lead times and projects started during the boom years are still being completed. Once those projects are completed demand will diminish further.