Opportunity in disaster

2011 has already had it’s share of natural disasters. From the hurricane in Australia, the earthquake in New Zealand, and now the recent earthquake in Japan, there has been literally hundreds of billion dollars worth of damages. While many have died and much property destroyed, we cannot forget about one of the most important parts of all – the rebuilding process.

The physical rebuilding process will require many materials from around the world. Let’s take a look at a few commodities and how the market is reacting to the events and the upcoming rebuilding anticipation:

Lumber Commodity
Lumber Futures contracts are traded on the Chicago Mercantile Exchange and are delivered in January, March, May, July, September, and November of ever year.

 

We also need to pay attention to reactions from the nuclear reactor in Japan. If you happen to be invested into uranium futures, it looks like now is not the time to be in it.

Uranium Futures
Uranium futures are traded on the New York Mercantile Exchange are delivered every year in January, February, March, April, May, June, July, August, September, October, November and December (all months).

Steel
Steel will probably be needed for the rebuilding process. However, car manufacturers in Japan have also been affected. Arcelor Mittal is the largest producer in the world. Will they benefit from this as well?

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Comments
2 Responses to “Opportunity in disaster”
  1. Great article. Just curious, besides the Commodity and Futures markets, do you feel there is any opportunities in the fluctuations in the Nikkei stock market? With it losing 10% in the week following the tsunami, I’m thinking there has to be a few opportunities to find undervalued stocks…

    • Gian Sorreta says:

      There definitely will be some opportunities from the drop in values. However, it really depends on each companies ability to recover and the ability of Japan to recover.

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