Hi Puska,I firmly believe China will want to cut off from...

Hi Puska,

I firmly believe China will want to cut off from Australian IO, when it can. But they’re in no position to be able to do it for at least 5 years.

Even if Vale could go back to full production in two years time, it would only represent 100-120mt/year. Australia accounts for FAR higher numbers than that, so China couldn’t do it then.

At best they’d have to until their African hub is up and running.

Not to mention the likelihood of other nations wanting to prop up their economies after the damage of Kovid subsides via infrastructure stimulus. Given that every country in the world has gone into deep recession as a result of it, I think there would be a high enough number of nations going down that route to keep the industry making good profits, even with the possibility of more IO in the market.

What FMG should do is take advantage of this period and start to look to slowly export more and more IO to other first world countries. This would help us to become less reliant on China and create a more stable long term market.