Iron ore price, page-7454

I agree with you.

Another possible outcome of the prolonged premium for higher grade ore (and lower prices for lower grade) is that it could motivate investment into higher grades which could then lead to more supply of the higher grade ore. When prices then revert to normality there will be additional supply of higher grade and allow the Chinese to continue to demand a discount for lower grade.

Just a thought and not based on any analysis of the supply side of higher grade ore. But it does seem to me this pain for lower grade (and by lower grade I essentially mean whatever the Chinese decide to label as lower grade) could persist and be part of a longer play to control iron ore prices into the future for some time.

FMG could have been courted for some time to assist the Chinese to play this game. Lend them money for additional ships at lower interest rates, concentrate their supply into China, treat Twiggy and co as royalty and then now use them to manipulate the iron ore market. I think the environmental regulations are real but I think there is also a bigger play going on here and FMG has been caught seriously flat footed and unaware.