how vulnerable is rio tinto?, page-3

Even the intelligent investor, who are self-proclaimed bears on rio tinto, wrote that rio was a buy under $55. Despite their bearish analysis, they still conceded that 'this is the best iron ore business in the world.'

High cost Chinese producers will become unprofitable soon, hence there will be a floor at the 110-120 range. Others, like commodity analyst Justin Smirk, argued:

"We’re getting increasingly suspicious of estimates of large supply responses,” he said by phone. He’s forecasting iron ore to trade at $185 a metric ton by the third quarter of next year from $135.50 a ton currently. “China’s ability to raise domestic iron-ore production profitably is being hampered by rising costs.”

http://www.businessweek.com/news/2012-07-10/billionaire-forrest-leads-blackrock-buying-iron-ore-commodities