Nine Lives, FMG was riding on a wave of supply-demand imbalance in a sea of boom. Twiggy got in at the right time and used his salesman skills to get funding. Where did he get those funding from? Yeah junk bond markets in US and not any banks right. SDL now is begging for funding on the wrong side of that trend. Whether investors like it hear this or not but for the time being mega sized project will not get funding unless the supply-demand curve changes big time. Can anyone see China pumping the interest rate levers to boost the IO price? If I was the top guy there I would be really happy with the IO price since no one likes expensive.
China have not had any success with the IO sector, Pilbara and mid-west are littered with prime examples of major investment failures. They want to rise from the "mug" status and will not simply chuck money at the next IO project with the mindset of not letting the majors 'control' the price. Well who do you think is 'controlling' the IO price right now?
SDL Price at posting:
2.7¢ Sentiment: None Disclosure: Not Held
