It's the confluence of a range of factors. I have a quick unranked list:
1. The significant perception change amongst local and international analysts about the price of Iron ore remaining higher for longer, as in into 2022 and beyond
This factor for me is the biggest reason for the run on.
The likes of Fenix, CAP, Strike. Red Hill, GWR, AKO TI1 etc etc etc all did very well today with many of these guys doing 7- 30% today.
2. The continued strength of the Futures market for 62% fines hitting ATH today and showing significant strength through out last week and surging again today. Forward contracts are at over $170 in Sept, whilst May is almost $190dmt.
That is like $240Au dmt (1 Aud : 0.78 Usd )
3. The recent issues with Vale. Failed to reach its lofty production goal of 72m tonnes for Q1 delivering about 68m tonnes. No one is convinced it can reach its forecast of 317m tonnes for the year. Where do we start with Vale?
Corrupt, mistake prone, under threat by an uncontrollable virus killing everything in sight. Environmental disasters and legal challenges to giant fires that shut down vital port infrastructure. And the list goes on.
4. Higher margins for steel mills. Near records in fact. Both rebar & hrc are receiving wonderful prices on global markets.
Despite the attempt to limit the production of steel in Tangshan to cut pollution - Chinese steel markers are making soaring profits. March & April saw profits from HRC spike to be close to ATH's.
5.The Seaborne and spot prices we are receiving are fantastic. At ATH especially with consideration for the where the AUD is at. Today's Iron Ore Boom is producing far bigger profits for its miners, not only are we producing more but we are doing so with an extra 25% due to the currency difference alone.
6. Assuming we produce a div of $2.41 PS 100% franked, this equates to $3.44 grossed up yield. At $22.70 that's a yield of 15% . Not a bad half year
7. Growing Stimulus spending globally ensuring that the price of IO will remain higher for longer.
8. FMG has vision; courage and brilliant management
It's no mystery why iron ore is in so much demand. Iron Ore is the most important industrial metal for building large scale infrastructure.
(20min delay)