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Iron ore - supply and demand rides again
Topic Started: 30 May 2014, 03:23 PM (44,291 Views)
stinkbug
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Mustapha Mond
19 Jun 2014, 11:27 AM
http://www.macrobusiness.com.au/2014/06/daily-iron-ore-price-update-no-bottom/


The surplus cash from the iron ore stash
Appears to be declining.

Where would that surplus cash be stashed??

A pile of bricks and sticks??

Little better than a beaver, poor thing with a fever.

Just imagine beaver fever.

Or worse still home owner pneumonia,

Peter


I like you Peter, but are you medication at the moment?
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Foxy
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Zero is coming...

This applies to its 57 per cent FE Robe River fines and will see Rio receive about $US73 a tonne for its low-grade product.

http://www.macrobusiness.com.au/2014/06/iron-ore-sacred-cows-plod-to-the-knackery/

Peter
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Foxy
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Zero is coming...

stinkbug
19 Jun 2014, 11:33 AM
I like you Peter, but are you medication at the moment?
No i don't take it anymore.

I don't think it ever worked actually.

The best stuff said on the bottle don't mix with alcohol.

But i don't think it works even with a bottle of whiskey.

After 30 years of medication and in the end a bottle of whiskey a day i said to the doctor i don't think it's working.

He pointed to his head and said your mad :bl:

https://www.youtube.com/watch?v=qLrnkK2YEcE

Man i save some money now.

Walk along the beach, cup of coffee and watch a sunset.

Peter

http://www.yieh.com/2.2.01.01stainlesssteelnews.aspx?no=70444&division=A5

When i went to the Pilbara 34 years ago you could not give the iron ore away.

Peter
Edited by Foxy, 19 Jun 2014, 03:12 PM.
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Lef-tee
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Iron ore price claims it's first victim among mines
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lulldapull
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Leftee, this is going to get a lot worse. Atlas, FMG etc are scraping by the skin of their teeth these days.

Another $10 drop and we might see their end too. Along with another 10,000 boys out on Perth streets.
Edited by lulldapull, 19 Jun 2014, 07:04 PM.
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newjez
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lulldapull
19 Jun 2014, 07:03 PM
Leftee, this is going to get a lot worse. Atlas, FMG etc are scraping by the skin of their teeth these days.

Another $10 drop and we might see their end too. Along with another 10,000 boys out on Perth streets.
So, it's viable if prices fall below $100. Let's hope so, for Gina's sake.
http://www.abc.net.au/news/2014-03-21/leaders-welcome-gina-rinehart27s-roy-hill-project-deal/5338036
lulldapull
19 Jun 2014, 07:03 PM
Leftee, this is going to get a lot worse. Atlas, FMG etc are scraping by the skin of their teeth these days.

Another $10 drop and we might see their end too. Along with another 10,000 boys out on Perth streets.
Do you think fmg will close? It could be viable without the debt, but there wouldn't be much return.
Edited by newjez, 19 Jun 2014, 07:19 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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peter fraser
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Lef-tee
19 Jun 2014, 07:25 AM
Well do you think that a sharply depreciating currency would not reduce purchasing power for a nation of consumers who import practically everything? The demand might still be there but it would be notional demand rather than effective demand as Marx would have said - people might demand things but if it isn't backed by spending power then they can't buy them.

Have you been watching wage growth decelerate to the slowest pace on the official record? Why do you think it will take off in response to hikes in the cost of living via the tradable sector? This isn't the 1970's where labour union power was at it's zenith as they represented over half the workforce - they are a pale shadow of their former selves representing only about 13% last I looked and just don't have the power to engage in anything resembling a 70'-style wage-price spiral.

My concerns about the CAD are different to those expressed by flawse - I am not concerned about the existence of the CAD per se but rather by the situation it represents in the context of what is beginning to happen now. "Growth is flowing out through the current account" are not originally my words but those of Australia's foremost MMT proponent, Bill Mitchell. The fact that in order to consume most of what we do, the bulk of that spending must flow out the external sector is not a problem as long as the lost spending is replaced. We have long been running on one of two sources - net government spending or increasing private sector borrowing. Net government spending is out of vogue and austerity is in - and how much scope does the private sector have to increase it's borrowing? It's been going sideways since the GFC and interest rates are at half-century lows with not a great amount of ammo left.

Have you been wondering why the situation that has caused the Kouk's backflip even exists? We have the biggest resource investment boom in history and interest rates at half-century lows - the economy should be absolutely red-hot. Yet domestic demand remains too sluggish for employment to grow - did you see this situation emerge once the stimulus was withdrawn? Net government spending is not going to be a source of growth unless they change their stance.

Government won't supply growth and the central bank can't supply much more in the form of lower interest rates - what are the possible scenarios once the tidal wave of investment spending being injected into the economy goes dry?

Surely we will adapt to whatever comes but I'm not yet convinced of a smooth, quick baton change given the facts above. Is that not a reasonable position?
I'm not clever enough to speculate on exactly what might happen if our sales of iron ore collapsed and our dollar followed it down, but I do know that a whole lot of industries have suffered badly because of our high dollar so it's not hard to accept that if we reverse that with a lower dollar those industries will get an unexpected kick along and start to perform well again.

BTW the miners would also gain if our dollar fell. The share price would fall as dividends for overseas investors fell in their currency, but the income in AUD would be helped.

I know that there will be negatives with a lower dollar but there will be positives as well.
Any expressed market opinion is my own and is not to be taken as financial advice
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lulldapull
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newjez
19 Jun 2014, 07:17 PM
So, it's viable if prices fall below $100. Let's hope so, for Gina's sake.
http://www.abc.net.au/news/2014-03-21/leaders-welcome-gina-rinehart27s-roy-hill-project-deal/5338036

Do you think fmg will close? It could be viable without the debt, but there wouldn't be much return.
It's obviously not viable at $88 today, let alone $100

Chances are it's headed to what uncle mustapha hinted to..........$60/ ton!!!!

Rio is already selling the less rich ore much cheaper. The iron ore game is coming to an end.
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Lef-tee
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The crux of my whole line of questioning is: what will the drivers of growth be once the current gigantic wave of investment spending flowing into and through the economy ends?

A few short years ago, it was pretty much consensus that anyone who thought that the economy might struggle to perform once the stimulus was withdrawn was an idiot. That consensus has now been whittled down to Adam Carr and Mike and a few others - even the Kouk has had to face reality.

Were governments of an expansionary mindset and were it obvious that there was plenty of fuel left in the private sector credit expansion fuel tank, the answer would be easy.
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Foxy
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Zero is coming...

Like buying fur burgers
if you can find better, cheaper fur burgers closer to home???
The fur burger providers further from home may have to shut up shop and find a good man to marry and settle down.
The iron ore will be needed for a time.
Then the demand slows, you know the rest.

Just imagine the iron ore suppliers in Brazil.

Peter
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