Demand for certain commodities is contracting around the world, making the case for shorting a few of them, Queen Anne’s Gate Capital Management CIO Kathleen Kelley said Thursday on CNBC.
“We tend to look at commodities as really being a supply-demand play,” she said on “Fast Money.”
“When we look at demand — supply is adequate in most of these commodities — when we look at demand, including coming from China, in a lot of these sectors it’s just not there.
“For example, copper demand is actually holding up OK in China because it’s tied to the power grid and the infrastructure spending. The infrastructure budget in China hasn’t really been used and probably will as we change leadership there, there’ll be more of a potential to use that.”
By contrast, zinc, which is tied to steel production, is at an all-time high.
Kelley said she was a seller of crude, soybeans, platinum and silver.
Her top short? Crude.
“Crude supply — it’s not obviously a domestic supply issue — but domestic supply is at all-time highs when you include alternatives,” she said. “The positioning is fairly long, so we expect crude to move further.”
Trader disclosure: On Sept. 27, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Steve Weiss is long TOT; Steve Weiss is long HK; Steve Weiss is long QCOM; Steve Weiss is long AIG; Steve Weiss is long M; Steve Weiss is long WLP; Steve Weiss is long VZ; Steve Weiss is long VOD; Steve Weiss is long T; Steve Weiss is long CLNY; Steve Weiss is long AMTG; Steve Weiss is long MTGE; Steve Weiss is long BAC; Steve Weiss is long EUO; Steve Weiss is short VALE; Steve Weiss is short BHP; Steve Weiss is short RIO; Steve Weiss is short GOOG PUTS; Steve Weiss is short AAPL PUTS; Steve Weiss is short AKS; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Jon Najarian is long call spreads in AAPL; Jon Najarian is long call spreads in GS; Jon Najarian is long call spreads in JPM; Jon Najarian is long call spreads in YHOO; Jon Najarian is long call spreads in SBUX; Jon Najarian is long call spreads in FB; Jon Najarian is long call spreads in GOOG; Jon Najarian is long call spreads in HLF; Jon Najarian is long call spreads in DECK; Jon Najarian is long call spreads in TEX; Jon Najarian is long GLUU; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long STSI; Mike Murphy is long AAPL; Mike Murphy is long WFC; Mike Murphy is long TGT; Mike Murphy is long TWI.
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