nightmare, page-107

china will continue to grow at 7% + pa hence steel growth will continue.

ore price will be a balance act between supply and demand.

1 - chinese growth will drive demand and it will be inflexible
china demand will continue over the long term, it will be volatile but it will also be inflexible ie it wont be manipulated just to to control the price of iron ore so as long as the chinese gov continues on the path of growth as it must to satisfy the chinese peoples aspirations then we can say that chinese growth will be stuck indefinitly in a materials demand trajactory.
hence iron ore prices will stay up in keeping with demand growth

2 - supply of iron ore is flexible
iron ore miners can control the price of iron ore by adjusting production output to suit demand fluctuations which can affect the ore price.
no big miner in rightfull mind will give away top quality ore at give away prices.
if the ore price goes down due to over supply then the majors can limit production. the chinese already have accused them of withhold supply on the spot market.
hanging on the shirt tails of the majors are juniors like fmg, ago, and gbg.

fmg - highly debted, mining high volume low grade ore.
ago - no debt but stuck for ever mining low grade low volumes without any prospect of getting 400k of railway to port.
gbg - highly debted, processing low volume ore to high grade. has port and rail to 16mtpa and maybe later 30mtpa with okajee. has 100% offtake with ansteel.

gbg, can survive if the ore price drops to $100t with its rail, port infrastructure in place, 100% offtake and 20% concentrate premium.
ago, can survive as it has no debt.
fmg, survival is doubtfull with its high debt and low grade ore

if the ore price drops to $100t three things will happen

1 - the majors will moderate production to stabalize the price so not to give away the good stuff for peanuts, they already have said they are going to expand in a controlled manner.
2 - $100t ore will wipe out many low grade chinese miners.
3 - $100t ore, or the prospect of low prices will make all the other new wannabe startup project be scrapped.

over the longer term, flexible production and no new mines will ensure ore prices will stay stable along with inflexible demand growth.