Reading through the posts it seems again the "Get Rich Quick" crowd is down ramping MGT.
I suspect most have no idea what is really happening in China at the moment and why Iron Ore price is decreasing.
Personally, I block those that I feel add zero value to my investing strategies so I can only assume the rubbish that Daz and Luckbrother are sprooking...
Let's look at current Iron Ore prices and steel prices.
I.O. today dropped below $90.00 USD/t , Steel (Rebar) selling at 4,326 CNY/t (Todays prices).
(Pricing is monthly averages)
May 2021: I.O. $205 USD/t, Steel (Rebar) selling at 5,975 CNY/t.
YTD HIGH for both I.O. and steel (Rebar).
Oct 2021: I.O. $121 USD/t, Steel (Rebar) selling at 5,961 CNY/t.
(massive profits for steel manufacturers).
YTD I.O. prices are down an average of 47% (Jan average price $168 USD/t)
YTD Steel Rebar is up an average of 4.5% (Jan average price 4,138 CYN/t).
Electricity is costing more to product that the "Fixed" sell price, this is forcing power companies to limit their losses by limiting power production, (this affects the ability of steel manufacturers to produce steel). Steel supplies are at record low stockpiles, estimated to be below nine days supply...
The construction industry (Civil) represents 25% of China's steel demand, 75% is consumer products and export...
Lots of fear generated by the current state of "Evergrande". Consider "Evergrande" builds housing (high rise apartments) not infrastructure, China has a "Housing Bubble" not an infrastructure bubble. Those that spend time in China will know the infrastructure in China (outside Shanghai & Beijing) is at least twenty years behind Western Cities. (This is a likely area of spending for the CCP to improve their economy post Covid).
China is deliberately slowing steel production to forced down I.O. pricing, the real question is how long can they continue to do this?
Consider the lack of steel in China is hurting China's economy, as steel supplies decrease steel prices will rise, rising steel prices allow other countries to enter the market (India, Bangladesh, etc), new markets increase I.O. demands, I.O. pricing raises with demand....
There has been lots of talk that China will increase steel production after the Winter Olympics, for this to happen China will need to increase power production (70% of China's power comes from Coal fired power stations), so I suggest you all keep an eye on coal prices in China as an indicator of when to expect positive movement in I.O. prices.
This is a snap short of Iron Ore and Steel in China.
If you have funds in MGT know what you have invested in, MGT will be a producer of "Green Steel", not the largest but will be a profitable player. Steel manufacturing will move away from China, it is inevitable, cheaper markets will emerge, "Green Energy" will dominate, carbon credits will see to this... Regardless where steel is produced, the future of steel will be greener than it is today, MGT will be part of the "Greener" future, the question we all need to ask ourselves is; if we (as investors) are going to be apart of it or not?
If you consider yourself as a trader best you move along as the liquidity of MGT will be very low until next years DFS is released.
Thanks for reading, all in my opinion as always....
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