big vol on fmg today, page-19

i think you're probably right. there seems to be a concept of dmt per unit (which means you multiply the price by the percentage iron ore content) but pricing concepts seem to have shifted to per tonne rate. If fmg did get $130 tonne (which i now concede is the more likely) then it has achieved massive margins for this quarter - about $900 million (130 less 12 for shipping less 32 for production gives $86 per tonne). Big question is whether this price is sustainable - if prices reverted to 2009/2010 rates then fmg only just breaks even at $55 a tonne (check out July - Dec half year report). I'm trying to work out whether to short fmg - long term I'm a china bull but i think in the short term china has to slow down quite significantly. FMG is a hugely leveraged play on your china view.