News: Champion Iron achieves record net income in June quarter, page-6

Why two of the board members sold 100,000 shares each?
Is there something wrong?

It’s acceptable for the management to delay its decision on the phase 2 expansion study and to delay its tax payments due to the Covid season but the company had added additional budget of 30mil for the expansion project so It’s a good sign that P2 is still active.

The company had delivered two vessels to the Middle East as they proved the higher grade material was highly desirable for pellets producers by just simply adjusted the milling flowsheet according to the demand.

The iron ore pellet material is suitable for electric furnaces in Europe. The current premium price was only a fraction over the reference P65 price but the company was still bullish about the demand for this material.

Ok how and what’s happening with the demand?https://www.spglobal.com/platts/en/market-insights/latest-news/metals/073020-jspls-steel-export-thrust-to-taper-amid-indian-market-recovery

India steel market has been growing amid the coronavirus
Its demand will approach to 300mil mt/yr of steel in 2020

China steel producers has been ramping up up to 90% capacity amid weaker steel price https://www.spglobal.com/platts/en/market-insights/latest-news/metals/072720-china-becomes-net-steel-importer-first-time-in-11-years-in-june


The US, Europe steel producers had experienced slow down in steel productions and they were still unable to predict when will they ramp up to its previous capacities but the government infrastructure incentives and green vehicle objectives have put them in a hard position either to compete with China or to import.

Vale also intended to produce 400mil mt of iron ore in 2020 onward.

How will steel price will react to the news?
I think the India market will absorb all of Vale’s iron ore output although I don’t know how much iron ore to produce 300mil mt of steel.

China will of course ramp up to maximum capacity to satisfy its local demand given its export of steel products at the ports were less active because of the coronavirus.

CIA has a great position to take care for the demands in the US, Europe, Uk, Mexico, Italy and Turkey once the steel producers come back online.

Anyway the iron ore price will have to rise and the gap for Cia premium price will be higher than P65 price when the steel price is starting to rise.

If the steel price is contracting due to the flood of steel products on the market then the company will still export its high grade ore to Asia.
Cia is in a win- win position so I will hold this stock for a long time.