According to morning money FMG cost price including finance is $63.
The iron ore price is trading at US$70 per tonne. Based on its total costs, this represents a profit of roughly $6.50 per tonne for Fortescue
According to smh, FMG sell iron or at a discount of 20% due to their product being low grade.
This has been industry knowledge for a long time. Fortescue revealed a price discount of 20 per cent below the benchmark price in June.
I believe Iron ore prices will stop around $45 - $50 ton. At that low price FMG will only receive $40 ton and have a short fall $23 ton.
Their production price is too high considering 2007 prices were $50 before the stimulus in an over heated economy.
http://www.moneymorning.com.au/20141125/fortescue-metals-group-share-price-fell-today-12.html
http://www.smh.com.au/business/disc...stay-says-bhps-mike-henry-20140722-3cdmw.html
FMG production cost $63
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Mkt cap ! $67.42B | |||
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