Price of Iron Ore, page-788

Hi All,

We are all trying to figure out whats next gazing into our crystal balls.
With China history gives us some clues.

Remeber the coal when china said no more low calorific crap.
Overnight that shut down a large percentage of Indonesias coal mining.
Also remember the ban on Australian coal.
Even with power cuts and freezing houses they didn't alter their stance.
Two or three years later I believe those 30 or so coal boats have finally been unloaded or allowed to go elsewhere.

I can only guess that had something to either do with PORT congestion OR China worked out a 60kt coal vessel doing a delivery run monthly is loss of capacity of around 750kt a year.A cape 2 million tons a year,between 45MT to say 100Mt of coal shipping capacity lost over that time.
They are short on coal and boats to ship in to meet growing demand.Part of that cost is the viability of overseas miners shipping at a profit.
The reality they probably worked out they needed the tonnage to ship what China needs.
A significant loss of face to Australia.

So back to IO.
What could possibly happen.
Seeing the same scenario play out a shift to higher grade ore with an ongoing desire to freeze out Australia.
They have tried to secure alternative sources of supply but shipping time meams more boats needed for the same tons from elsewhere.
Ease that pressure by eliminating Steel exports to take the pressure off shipping and escallating costs.
That extra shipping cost may also make Chinese steel uncompetitive and more expensive on the domestic market.
Above all else China requires stability in everything especially PRICES to quell public dissent.
Hence its moves to ban steel exports and the capping of production.
The current power crisis is an example.
Power plants wont buy coal to make power if the price rises as they have price caps.
Mongolia has all but stopped exporting coal to China because of Corna virus.
So factories fire up diesel generators due to lack of power and Now diesel is rationed to 100LTRS a day to quell demand.
The transport industry has basically ground to a halt as a result.
Iron ore mines run at a LOSS and have done for years where employment doesnt exist for displaced workers if closed.
That cost arguement flies out the door.Only China mines ore as low as 23%FE.
FMG has higher grade ore and is heading in that direction.I believe it blends down for maximum dollar/tons.
It's cost base is embarrassingly low per ton.
Fenix has higher grade ore so its safe for now.
Maybe there is also a desire to push back on FMG to reduce its income as Twiggy is setting himself up to be a green steel producer. which would be in direct competition with chinese steel industry.

I hope this helps in how you see the Chinese world at the moment.
Add blue skies required for significant events for propoganda needs to come which can only be achieved one way.

That is why freedom of decision making looking at the bigger picture always wins out over narrow minded technocrats/autocrats trying to achieve just one thing which they never can without affecting everything else.

Just thoughts and probably wrong.
If your not getting the news about what I mention is happening in China and other places you could take a jaunt to Al Jazeera news occassionally,when you get sick of hearing about some nobody celebrity on the news.

DYOR +DYODD