Iron ore price, page-8994

Yep agreed. Could look at taking over companies that are capital strained and require investment to further develop projects. There must be many out there given how much the ASX tumbled in the last couple of months. Specs would have been hit even harder.

Reading FMG Dec 14 quarterly and it mentions sensitivity to oil and FX rates. When c1 costs were USD 27.37, they said oil prices were 12% of total c1 costs. This would have been around USD 3. 

I would say given higher economies of scale due to higher production, more efficient mining, oil may make up say USD 2 of c1 costs. Given they are averaging around 25% less this quarter compared to last, we could see savings of USD 0.50.

Shipping costs would be well down. Capesize rates have now fallen to USD 6 per tonne. They were USD 9 per tonne not too long ago.

Also, in Dec 14, FMG said for every 1c appreciation of the USD would result in USD 0.25 cost savings to FMG. This may be around USD 0.10 pe 1c appreciation nowadays given the much lower C1 costs. This could be around USD 0.30 savings potentially. 

In any case, FMG should be thriving at the moment. Unbelievably it is stuck in a narrow trading range trading at a very low forward PE ratio.