A $10 SP would be nice. Definitely a possibility. I sold some at...

First 4639 Last

Share
Profile

Follow
Dancing

4,724 Posts.

473

18/02/16

12:27

Post #: 17052556
Share

Originally posted by blackeyed ↑

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.

Expand

A $10 SP would be nice. Definitely a possibility.

I sold some at $2 today... I really should of held on a bit longer. :/

FMG Price at posting: $2.03 Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

Reply

Top Stories

DUR

Duratec snags $76.5M in works from Woodside and Defence respectively - including spy network upgrade

FBR

FBR's robotic home construction tech passes first US early-stage structural compliance check

FRB

Firebird snaffles Environmental Permit for Jinshi plant

GL1

Global Lithium latest hit by lithium downturn; shares fall -10% as Manna DFS paused

SDF

Steadfast Group sees $600M wiped off on resumed trades after Four Corners feature

This thread is closed.

You may not reply to this discussion at this time.

There are more pages in this discussion • 15,419 more messages in this thread...

First 4639 Last

Add FMG (ASX) to my watchlist

(20min delay)
Last $15.96		Change -0.245(1.51%)		Mkt cap ! $49.77B

Open	High	Low	Value	Volume
$16.40	$16.41	$15.91	$127.9M	7.897M

Buyers (Bids)

No.	Vol.	Price($)
39	48473	$15.95

Sellers (Offers)

Price($)	Vol.	No.
$15.96	10342	26

View Market Depth

No.	Vol.	Price($)
14	11086	15.940
20	29051	15.930
16	29629	15.920
35	36795	15.910
129	87981	15.900

Price($)	Vol.	No.
15.950	7149	13
15.960	25107	37
15.970	18129	20
15.980	36258	15
15.990	17659	11

Last trade - 15.56pm 10/09/2024 (20 minute delay)

FMG (ASX) Chart

A $10 SP would be nice. Definitely a possibility. I sold some at...

Duratec snags $76.5M in works from Woodside and Defence respectively - including spy network upgrade

FBR's robotic home construction tech passes first US early-stage structural compliance check

Firebird snaffles Environmental Permit for Jinshi plant

Global Lithium latest hit by lithium downturn; shares fall -10% as Manna DFS paused

Steadfast Group sees $600M wiped off on resumed trades after Four Corners feature

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

A $10 SP would be nice. Definitely a possibility. I sold some at...

Top Stories

Duratec snags $76.5M in works from Woodside and Defence respectively - including spy network upgrade

FBR's robotic home construction tech passes first US early-stage structural compliance check

Firebird snaffles Environmental Permit for Jinshi plant

Global Lithium latest hit by lithium downturn; shares fall -10% as Manna DFS paused

Steadfast Group sees $600M wiped off on resumed trades after Four Corners feature

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News