I'm taking some out even at this price, as another drop and its care and maint. I would think, that our cash of 23m, and other listed assets, may give rock bottom support nearer 35-40m mc.
At 130 US/t / 0.71= $A183 - 30 ship - 120 cost - Royalty (over looked) = Not much left. Just a sniff above the care and maintenance trigger.
So , if iron ore were to hit again to say 120/t. ($A169 - 120-30-Roy 15?) = STOP.
The bet is uncomfortably close, to either a drop from 70m mc, to 40m ? or a rebound to 85-100m. I really hate when the underlying control, is beyond our ability to manage. It comes down to Why if China has said, we want to bring down steel production. Pollution ? Is it political ? Another arrow at Australia ? Is it gearing up for the invasion of Taiwan ? at which point the gloves are off, and it will probably get sanctioned, and our trade with china will be called into question, to back the allies who defend taiwan. Can we supply iron ore to china, if they are in a hot war with the US, Japan, and us. No. Can we put tarrifs on iron ore if we want to exert pressure, without any military involvement ? Perhaps why China is looking at its own internal iron ore mines, and those costs around 100+
Protection of capital is important. Reduce size of position to manageable failure hedge.
GWR Price at posting:
21.5¢ Sentiment: None Disclosure: Held
