The area affected by the quakes is relatively small and most of Japans industrial production is outside of the quake zone. Perhaps power generation is the bigger threat to industrial output, since the loss of a big chunk of the nuclear generating capacity will impact the entire country, even for those factories that are not damaged. So the question of how much this will diminish commodity demand is going to revolve around how long it takes to restore marginal electricity generation. It looks like at least 2 of the nuke plants will be offline for several quarters and one may never be safe to operate again.

Rebuilding infrastructure could start very quickly and there is going to be a prioritized effort to restore rail, highways and bridges, and port facilities. This will be replace some of the base metals consumption that is displaced by lower overall industrial output. Further down the road thousands of residential and commercial buildings will be rebuilt.

I notice rare earth elements are getting hit hard today. Japan is the largest consumer of these metals and demand will probably decline for a few months but the supply is so tight that it may just be the opportunity Japan wanted to establish stockpiles before consumption recovers and therefore the actual buying of the metals may not decline at all.

Uranium is also hard hit today. It is always possible that other plants will be voluntarily taken offline, and that some future demand may be curtailed if new plants are not built. However the investment in these plants is huge and it is very unlikely that more than a fraction of the entire nuclear power infrastructure worldwide is going to be affected by this event. Uranium demand will not change. To me this is a huge buying opp for all uranium producers as the market has over reacted and the sector will recover.

cheers!

mike