It's missing capital expenditure. They were saying it's 4 USD.
Anyone know how they classify capital expenditure? Is it the money that is needed to replace equipments and drill new holes in order to keep operating at replacement rate? Let me know if you know.
BHP has 28 USD plus 5USD capex. Rio has 30 USD plus 7USD capex. Arrium has 43 USD plus 4 USD capex. (All rates are for 100% of platts 62% Fe)
Current spot of 41 USD means BHP and Rio are both very close to bleed.
Price is determined by demand and supply. Supply has one major constraint -- cost.
The big guy's current cost is the absolute lowest this commodity can fall to, which means it's around 35 USD, if exchange rate and labour rates don't change.
