bhp price traget 16, page-52

From Bloomberg 7 June .

http://mobile.bloomberg.com/news/2012-06-06/china-23-billion-steel-push-seen-igniting-iron-ore-commodities.html


China is set to jolt iron ore off a six-month low after approving an estimated $23 billion of steel projects that will use the raw material produced by mining companies such as Rio Tinto Group (RIO) and BHP Billiton (BHP) Ltd.
The commodity will climb to $152 a metric ton in the second half, according to the average of five analyst estimates compiled by Bloomberg. The price fell 0.3 percent to $130.6 today, near its year-low reached May 23, according to The Steel Index Ltd. Coking coal, another key ingredient in making steel, may gain 7 percent to about $220 a ton, analysts forecast.
“Commodity prices are already close to the bottom and are set to rebound,” Henry Liu, an analyst at Mirae Assets Securities Co., said by telephone from Seoul. “Prices will get a boost in the short term on speculation China will stimulate the economy. Real demand for steel depends on what incentives the government gives to drive investments.”
China approved new steel mills in the past two weeks as it tries to sustain economic growth after April industrial output rose the least since 2009. New plants of Baosteel Group Corp. and Wuhan Iron & Steel Group were among the 228 billion yuan of projects approved by China’s main planning agency, of which 65 percent are in the steel industry, worth the equivalent of $23 billion, Bank of America Merrill Lynch said in a May 30 report.

Regards Geoff (holding FMG)