Iron Ore Price, page-18011

Guys guys you are embarrassing me!
To the future - I have been going back through the supply numbers and I cannot see how iron ore prices will not be higher in six months due to supply shortages - yes supply shortages -

the only additional supply to come on from last year is some 14mln tons more from Roy Hill and 25 from SDI Vale, making a total of 39m in 2017. BHP and Rio have indicated 2017 numbers will likely be between 10 and 20m less than previous estimates - FMG is stable 90% of China's domestic ore is permanently gone.

Against that we have at least a 3% increase in steel output for China in 2017 - thats 50m tons - the closing of the arc furnaces Nev Power talked about is another 50m tons and Samarco will need to be replaced thats another 30. So first glance its 39 increase versus 130m increase in demand and thats just for China, and we know demand is increasing in the remainder of Asia.

So I see nothing but shortfalls not surpluses on a simple take. The huge mistake the analysts are making is that they assume domestic supply will raft up as prices increase - it won't its all low quality highly polluting and the policy battle is over- China won't allow the damaging environmental consequences of restarting these mines and consuming poor quality ore - if they are closing arc furnaces they are certaintly not going to allow mills to smelt ore with poor and high emissions output.

But of course I might be called cynical for suggesting many of the houses have well out of the money long term shorts which terminate in the second half of the year, and that might have something to do with the prevailing wisdom. I missed the $7 call but I am absolutely confident about FMG 10 by July and 13 by the end of 2017 as the reality of the shortages finally finally becomes apparent.