"sky rocketing prices"?? Are you talking about IOP or SP? Can you tell me which measures you used to come up with such conclusion? I‘m open for discussion but if you are only comes up with a conclusion based on your own opinions, then it is really just your opinions.
Chinese Tax 58% IO? Another "assumption"? Average FE feed in Chinese Steel BFs is around 56%, for them to feed only high grade IO, NO Chinese Steel Mills will be making any money. Chinese Steel Mills have always used 58FE, just that ratio has gone up recently to preserve their margin, and FMG is the only IO producer with MASS Produced 58FE enough to cater this demand. The Market (supply and demand) will determine the IO price, as long as 58FE is in high demand, IOP for 58FE will remain strong.
FMG doesn‘t really need "sky rocketing" IOP to justify it‘s current SP, it‘s "low" cost business just means that they will make more or less money in any environment, and they are making "unprecedented" profit RIGHT NOW.
At current 62IOP of US$84/dmt, FMG‘s NPAT is US$4000M+ or A$5700M+ PA, over priced for a A$21B company? No, I don‘t think so.
DYOR Frank
FMG Price at posting:
$6.78 Sentiment: Buy Disclosure: Held
(20min delay)