I lifted the following from a posting by Pathetictrader on the Mt Gibson (MGX) Hot Copper forum. Mt Gibson shareholders are wondering why their share price is around half of what it was last September when IO was priced at around $89. Seems to me Mt Gibson at berth 5 and Karara at berth 7 have a lot in common - both shipping, but suffering from predictions of a price crash. Anyway, have a read of the tales of woe on the MGX forum.
Cantankerous Jim
Copied from MGX forum Iron ore prices to crash soon: UBS
27 February, 2013 Andrew Duffy 1 comments
Share on emailShare on printShare on linkedin
Latest News •Mining slowdown dents business spend •Vale wipes $1bn off Aussie coal •Opencast plans for Pike River mine •Xstrata declares "zero tolerance" on synthetic drugs •UGL slashes over 1000 jobs
The iron ore price may slump 54 per cent to around $US70 a tonne due to a big lift in supply from mining companies, according to UBS analysts.
Bloomberg reports UBS said a recent spike in prices may force more Chinese iron ore mines to come online, flooding the market and sending prices crashing by September.
“We expect a big correction in the third quarter. We see a big lift in supply” UBS analyst Tom Price said.
Bloomberg reports Morgan Stanley research estimates global iron ore supplies will climb 9.1 per cent this year, with most analysts predicting softening prices.
The UBS estimate is lower than most however, with ANZ previously forecasting prices to level out around $US140 and Westpac and predicting $US110 by the end of the year.
UBS has previously issued warnings about the iron ore price, and said last year that moves to expand production in the Pilbara could threaten the viability of the Roy Hill mine.
GBG Price at posting:
23.7¢ Sentiment: ST Buy Disclosure: Held
