At the current US$123.40 per tonne, the IO65 coming out of...

At the current US$123.40 per tonne, the IO65 coming out of Karara is now worth AU$178.13. And as inventories are diminishing by the week, I can see it bust through the AU$200 barrier before the end of June. That is mega bucks!!
With that sort of cashflow - if the prices stay at that average for a year or so, then a substantial portion of the debt can be wiped off while the going is good. That alone should rerate the GBG Board's current stance on nil asset value.

Like I've said before - if it smells like one, if it tastes like one, if it looks like one - it probably is one....i.e. I smell a rat with this Scheme of Arrangement. Each shareholder can make up your own minds.

Iron ore staged anotherexplosive rally to start the new trading week

• Major iron ore grades soared by more than 3% on Monday, hitting levels not seen since early 2014.
• Chinese iron ore port inventories slumped again last week, falling to the lowest level since early 2017.
• Chinese iron ore futures briefly hit limit-up 6% on Monday, meaning the only thing preventing further gains was that market rules prevented it.
• Dalian iron ore closed at the highest level on record on Monday evening. Some put the bullish price action down to speculative buying rather than fundamentals.

Iron oreprices continued to surge on Monday, picking up where they left off last week.

The latestbuying frenzy coincided with news that Chinese iron ore port inventories fellheavily again last week. Global crude steel output also jumped to the highestlevel on record in April, helping to underpin demand for raw materials.

According toMetal Bulletin, the spot price for benchmark 62% iron ore fines jumped another3.1% to $108.62 a tonne, leaving it at the highest level since late April 2014.

Thebenchmark has now surged 70% from November 26 last year.

Even largergains were seen across lower and higher grades on Monday.

The pricefor 58% fines soared 4% to $90.46 a tonne, extending its rally from lateNovember last year to a jaw-dropping 128%. It now sits at levels not seen sinceearly May 2014.

65% finesalso rallied, lifting 3.4% to $123.4 a tonne. That’s the highest level sinceMetal Bulletin first produced data on the grade at the start of 2016, extendingits rally over the past six months to over 50%.

The bullishprice action in spot markets was mirrored in Chinese iron ore futures duringthe session.

According todata from the Dalian Commodities Exchange, the September 2019 contract closedat 761 yuan, up from 749 yuan on Friday evening.

It brieflysoared to as high as 771 yuan, leaving it “limit-up” 6% for the session. Thatmeans the only thing preventing further gains at that point in session was thatmarket ruled prevented it.

The latestburst of buying followed another substantial draw in Chinese iron ore portinventories last week.

According todata from Mysteel Consultancy, inventories have tumbled from 148.9 milliontonnes in mid-April to 127.8 million tonnes, leaving them at the lowest levelsince February 2017.

Vivek Dhar,mining and energy commodities analyst at the Commonwealth Bank, described thedecline in port inventories as a “major worry” in a note released on Monday.

“The factthat benchmark prices are already [above $100] a tonne with port stockpilesaround 128 million tonnes means that shortage concerns are likely to intensifyas we continue to see port stockpiles fall,” he said.

“Keep inmind that around 120 million tonnes is a ‘safe’ level for port stockpiles andprice are surging even before we’ve touched that level.”

The declinein Chinese inventories partially reflects the impact of disruptions toBrazilian iron ore seaborne supply, along with record steel production inChina.

According todata released by the World Steel Association (worldsteel) on Monday, global crude steel output surged to a record high of 156.7 million tonnes in April, leaving it up 6.4% on the same month a year earlier.

Thatincrease was entirely driven by Chinese steel output — the largest producerglobally — which soared to a record 85 million tonnes, up 12.7% from a yearearlier.

Over thesame period, output elsewhere in the world declined 0.2%.

The gains iniron ore spot and futures markets contrasted to weakness across Chinese steeland coal futures to start the new trading week.

Rebar andhot-rolled coil futures in Shanghai slipped to 3,842 and 3,666 yuanrespectively, down from 3,874 and 3,727 yuan on Friday evening.

Coking coaland coke contracts traded in Dalian also softened, finishing trade at 1,388 and2,259 yuan respectively, below the 1,401 and 2,305 yuan level where they closedlast week.

While allcontracts bar iron ore fell earlier in the session, there were universal gainsin overnight trade on Monday.

SHFE Hot Rolled Coil ¥3,688 , -0.59%
SHFE Rebar ¥3,859 , -0.44%
DCE Iron Ore ¥767.50 , 1.86%
DCE Coking Coal ¥1,399.50 , -0.36%
DCE Coke ¥2,273.50 , -1.52%

Of note,Dalian iron ore finished at another record closing high of 767.5 yuan,continuing to run ahead of the move in other steel and bulk commodity contracts.

Some believethat outperformance reflects the impact of speculative buying in iron orecontracts.

“Some bigfunds are trying to push iron ore prices further up,” a Shanghai-based tradertold Reuters. “Fundamentals do not support the current price levels.”

Tradein Chinese commodity futures will resume at 11am AEST.