Price of Iron Ore, page-388

IO prices have dropped relatively sharply for the past 2 months from ~US$220 (62%Fe fines) to US$100.30 yesterday including their relatively sharp fall for the past 2 weeks.

All details about the IOP index can be found here:

http://www.custeel.com/en/csi.jsp

The company revenue will depend on the IO production size in this quarter and strictly speaking on average IOP index.

Using the data from the above mentioned site, it is easy to find averages of IOP indices for the period of between 1 July and 17 September 2021:

Average Seaborne index 58% Fe fines =US$123.9 for 57days

Average Seaborne index 62% Fe fines =US$171.6 for 57days

Average Seaborne index 65% Fe fines =US$200.1 for 57days

Even taking into a consideration the IOP index for 62% Fe and an exchange rate ofAU$1=US$0.74 we have got a figure of US$171.6 for 62% Fe fines => AU$232. From a revenue from operations figure of ~$114mln and production of 0.501Mwmt (see recent company annual report), we have an average revenue from operations figure of AU$227.5wmt what is even less than the average of AU$232 calculated above.

Only 1.5 weeks has left in this quarter and a hedging policy will be effective from the start of October. So if the company production this quarter was similar as it was achieved in the previous quarter there is an expectation that the profit achieved in this quarter will be similar to what was achieved in the previous quarter when the SP reached 45c.

It was very strange that the stock was heavily sold out yesterday (a day before ex-dividend) by the people refusing to get a huge fully franked dividend next Monday.