chris1983, thanks for your input on BCI. I have been watching them as well but wasn't as comfortable with their grades. Still think they are undervalued though.
The lower grade ores are being accepted willingly by buyers right now due to the chronic shortage of iron ore, but in 2 or 3 years time that 'may' not be the case any more with lots of supply coming online in that period.
If the demand/supply balance is pushed back to a more neutral level then the first ore to lose demand would be the lower quality stuff. Not saying they would stop buying all together but then BCI would be competing with the likes of FMG who have billions of tonnes of CID and likely even more by then. With limited rail/port infrastructure already strangling our export capacity, I feel it would be more difficult for BCI to get their lower margin CID to market than UMC's marra mamba IF the demand supply balance returns to more normal levels IMHO.
UMC Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
