Hey Gassin. You are on the money mate.
IO Shorters should be concerned right now and so they should be.
Reasons for LT IO trend change:
- IO has triple bottomed now to recover back to 60$ per tonne.
- China stimulating its economy
- IO Supply exiting with more Chinese supply to definitely come out of the market.
- US long overdue for an infrastructure overall. If Trumps wins election, US will be pushing Infrastructure for sure.
- China pushing its Infrastructure initiatives.
- Chinas property again improving month on month clearing more inventory.
- India cities to urbanise with growth not seen since Chinas early days. India has huge demand potential. US will be jealous of its new swanky cities and will try and do better as Yanks do best.
- Asia growth improving.
- World economy working together to improve growth in general.
- Multinational supply leveled off. Over supply doom card has been dealt, used, overused and now being ripped up to be used as confetti over commodity bulls.
- Vales new tonnes was absorbed by the tonnes already exited the market. Eg Brazil and China.
- Given the last disaster in Brazil which opened the worlds eyes Multinationals now are more safety focused which will no doubt compromise IO output. It's the oldest saying in the book. Quality vs quantity. They're shifting focus now. Better safety and better returns for suffering shareholders. That means one thing. The IO price will go up and so will profits.
- World IO Demand has bottomed and on the increase.
- Commodity companies which were unloved will now be opportunities for investors who want significant capital returns into the next commodity cycle.
- US investors who are tech and bank heavy (oops!) will catch on to the commodity upside.
- Finance instos which are short heavy on commodities are targets to be shorted themselves. How about they short themselves! Lol.
- Australian mining companies are in the driver's seat for big returns.
The supply demand balance in my eyes has already happened and the cycle is returning to a bull market with LT IO trend shifting direction.
Note the media now are saying 'extended bear market'. Even they are over it.
Backing Atlas
AGO has done more than enough to survive and thrive. I'm backing Atlas. It's a better company now with solid partnerships with costs only just above the big 4. They have hedging in place to mitigate ST IO fluctuations. Debt is manageable and will soon be paid off in a few lump sums as IO returns to a more realistic 60+ a tonne level. When India ramps up soon after the IO recovery, watch out, IO will go from the 60s to breach 100 per tonne and our little AGO friend here will be in the driver's seat for a substantial capital return for investors. History will repeat itself for AGO in a positive way.
My SP targets:
3 cents ST
15-20 cents MT
40-60 cents LT (with share dilution already factored in post restructure).
Further announcements / outlooks expected for AGO:
IO to return to a balanced level 60s which reflects today's supply demand fundamentals. Profits profits profits. Expect better quarterly reports from here on in for AGO.
IO price per tonne to further increase as demand ramps up for Asian, Arabian countries and US.
AGO Debt restructuring to succeed.
AGO Debt to be paid off within 2-3 years.
AGO Share buybacks at a later stage.
AGO Share consolidation once the dust settles.
Tomboy, Gassin, eyeswide, Rcman, acca, haplo, richie, domster, hound, peregrine, Villa, Burnett, Deano, jagman and the new Srebrna keep up the good work within the IO forums.
Appreciate all your posts and support as we are not alone in our support for AGO and Aussie IO companies in general who deserve their place as leaders in the world IO industry. Thanks again
