If you read both BHP and Rio's comments lately they are at their...

If you read both BHP and Rio's comments lately they are at their maximum pain threshold. They thought by now FMG would be gone. Make no mistake FMG was their target. Much lower prices hurts them as much as FMG.

Reading between the lines of Sam Walsh's comments they won't get to their max production capacity any time soon. Same with BHP, they are both now into capital preservation bigtime and have cut their capex by a large margin. In both cases I bet some of the cut capex related to bringing them both to max capacity.

All the analysts oversupply comments are predicated on:

BHP, RIO and VALE at max capacity (not going to happen I think at least 50 to 75m tons won't eventuate).

China's high cost poor quality mines not exiting quickly, - wrong again recent data on volumes of shipborne ore have ramped hugely, its my bet the New China is powering down not only obsolete steel mills but all the iron ore mines associated with them and because of severe pollution concerns all the environmental bad mines (I believe we will see at least 75m in production disappear this year from China).

A substantial reduction in Chinese steel production in 2016, (not going to happen Finchs' Hong Kong office has produced data which showed Chinese steel production actually grew by 2.3% in 2015 and they believe it will grow slightly this year due to a very very substantial infrastructure spend ramping up (12 million affordable homes, Belt and Road, export of fast train contracts, urbanisation initiatives.

All this means we are probably close to equilibrium now and I agree with Fatprophets Capital economics and others Prices between $55 and $60 is now the low estimate for 4th quarter 2016.

At 60 my rough calculating is FMG makes 22 per ton or $3.6b per year 0r $1.16 per share. On a PE of 12 (discounted because of debt) FMG will be worth $13.92 per share. Do the math FMG is a Disallowed waiting to happen.