This brings on the next Q, why haven't they gone down this path and instead went after the junk bond market? I suspect with the low IOP the customer feels that it is in their benefit to not lock down cash just to reduced their IOP intake which they can just keep taking delivery of cheaper ores as time progress. Have you got any reports on the state of Chinese steel mills profitability on the whole.
From observing the recent gripe from the Americans accusing China of dumping steel products on their shores and with Europeans not happy but not daring to complain, I suspect these are desperate measures by the Chinese mills to churn because it came from the top that they must keep maintaining workforce numbers. If this is the case then both the steel producers and IO producers are racing down the toilet to maintain some profit and market share.
The other thing with today's rally just looks so suspicious. I check with MacPrime as I also have an account and confirmed that shorting FMG has been taken off. If as I read that IG Markets are the same then this rally just stinks of short covering. If those are forced closure of short positions because the broker are recalling the borrowed stock in order to return to the owners, then this rally is not reflective of the 'real' market sentiment towards fmg. I have been sitting and observing for sometime and had I been active in shorting it would have been a much more comfortable ride down instead of up. It is all about stress free as much as possible in any direction to maintain an objective price level.
FMG Price at posting:
$1.99 Sentiment: None Disclosure: Not Held
(20min delay)