fmg forcast $8.33 p/s, page-13

and this from the Australian wall st journal; 20 July
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While on commodities, it’s worth noting the Baltic Dry Index has its biggest weekly gain since May on demand for iron ore carriers. The Baltic Dry Index gained 19 per cent for the week, driven by a 26 per cent increase in iron ore cape sized leasing rates. This correlates with the strength in the spot iron ore price which hit $US91 a tonne into China last week.

You see, I believe the Chinese have totally stuffed the iron ore price contract negotiations. There are rumours of some mills breaking ranks from CISA and agreeing to “temporary” deals with BHP and RIO, while data shows you that Chinese steel production is back above record levels.

The massive Chinese stimulus aimed at steel-intensive infrastructure is working, and spot iron ore prices will play further catch-up to Chinese steel production. With just about all global iron ore production expansions on hold after the GFC, ask yourself where the supply is going to come from to feed this powerful Chinese steel industry demand?

Buy Fortescue Metals Group (FMG), RIO and BHP in that order for leverage to iron ore. I remain of the view that being short bulks into a reaccelerating Chinese economy is pretty much a death wish. Our core strategy is to be long everything China is short, and there is nothing they are more short of than high grade iron ore.

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FMG + 1.5%, BHP + 1.4% RIO + 2% This morning >>> all up.