iron ore price increases, page-4

copied from advfn in uk

DPMCQ - 25 Feb'05 - 11:11 - 779 of 780


New buy note issed on CNM by Numis

CONSOLIDATED MINERALS* (143.5p) - BUY - Target Price 181p - Higher manganese and chromite prices drive valuations higher
We are upgrading our target price valuation for Consolidated Minerals higher today through a series of price increases for manganese and chromite ores.
We have also raised our chromite ore price by 60% for 2006 and by 9% for 2005 from what were previously considered reasonable but slightly cautious levels.
Consolidated Minerals is better placed to benefit from the price increases seen in the market for steel related raw materials than many other producers as it sells around three quarters of its manganese on quarterly pricing with only 25% of manganese sold on a six-month price reset.
Today's news that Nippon Steel has increased prices by 63% is effectively a catch-up with the spot market and in our view may still lag the reality of spot market pricing in this area. We have also increased our longer-term chromite ore pricing assumption by 12.5% which further adds to our figures.

Net profit 2004A £9.7m, 2005e £27m, 2006e £48m
EPS 2004A 5.7p, 2005e 11.9p, 2006e 20.6p
PE 2004A 18x 2005e 9x, 2006e 5x
*Numis acts as broker to Consolidated Minerals