this is why I don’t really care about high inflation. If...

this is why I don’t really care about high inflation. If anything this substantially increases FMG’s competitive advantage over most other IO producers. The cost curve will increase greater in $ terms for the marginal suppliers than FMG which has very low c1 cost base and lower shipping costs.

BHP had admitted themselves earlier this year that the cost support lies somewhere between USD 80-100 in its economic and commodity outlook report
https://www.bhp.com/investors/econo...2/bhps-economic-and-commodity-outlook#ironore

Most of the supply increase in recent years has been from the marginal suppliers as opposed to the big 4. India for example shipped some 40mt of mostly low grade ore to China over the last year. Shipments to China increased 200% year on year! Thats a main reason why IO at Chinese ports has piled up. Supply from Ukraine also increased in the first quarter to China but in recent days their ports have been subjected to relentless attacks so not sure if exports can maintain the same run rate as the March qtr.

I remember mysteel in Feb gave a breakdown of IO at ports and some 40% of it was Oz ore. A couple of years back, 60% of it was Oz ore.

anyway with steel consumption and production increasing double digits year on year in India, it will not be long before the exports are reined in (even if IO price remains above marginal cost for Indian IO producers) to ensure adequate supply to Indian steel producers. India have a target of 300mtpa by 2030 and 500mtpa by 2045 so IO will be imported at one point.

all in all, fmg is in such a strong position and will continue to get stronger while inflation remains stubborningly high. The market (analysts) never have had any idea how to value FMG nor do I think that will ever change.