Which is precisely why Vale is struggling mightily to keep the...

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jhunt

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27/07/20

16:39

Post #: 46099968
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Originally posted by knowlesm: ↑

I was in sales for 25 years, in a very competitive market.

I understand everyone does not think like a sale person.

its not a given as a sales person or a company that you will retain all your customers, sales revenue income or profit each year as there are various market forces. Customer tender for business , customers and purchasing managers want consistency of supply and a competitive price.

Sometimes consistent supply outweighs the price, especially when the end product is supplying major customers, who are willing to pay a premium for the end product or the product at end of the supply chain. E.G China stimulating infrastructure projects post their Virus challenges.

In simply terms, a Chinese buyer may think it more sustainable and less risk adverse to procure from Australian IO producers over the next 6-12-18-24 months than other countries that may have problems with contracted supply of goods.

With FMG advancing their IO portfolio to cover the spectrum of the IO market ( e.g. 58- 60.1 and 67 % IO) they increase their opportunity to increase their customer base and take customers from their competitors.’who can potentially be considered a supply chain risk. Increase business means a increased mining output effort or performance. (210 tones)

Whilst it may seem a potential flooding of the market by Austral ian miners , it could be seen as a two fold shift IMO-

1/ Australian miners taking market share based on ability to supply ,( FMG having the market covered 58-60.1 and 67 % IO)
2/ global steel market growing which requires the stated Aussie IO miners increased production.
( world needs to stimulate in current position).

IMHO - both are a win win for FMG.

kind regards

MJAK

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Which is precisely why Vale is struggling mightily to keep the iron ore trains running frequently between the Carajas mountains in the Amazon jungle and Sao Luis and the Ponto de Madeira terminal at the mouth of the Amazon- even though they are putting lives in danger by doing so. There is no doubt that all of the activity is adding to the infection rate, just look at Itabira, and the mine suspensions there.

FMG Price at posting: $16.37 Sentiment: Buy Disclosure: Held
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