Very true snake, the quicker and harder we fall, the sooner we can stop falling and coast sideways perhaps for a year or two.
JGPM, I say I hold a position as I am disclosing that I am short BHP right now. Well, technically/specifically with puts I should add.
Barnsty I realise I ruffled a lot of feathers with my past BHP targets as it is obviously mainly shareholders on this thread, but I will moderate my predictions so as not to annoy holders too much. A think a BHP target of 10$ will be much more palatable than say $5, (which I must admit I was saying just to be extreme and prove a point of bearishness). I know I have a lot of bears' respect, but I don't want to lose the respect of perma-bulls as I want to be able to exchange advice with everyone.
I don't know how to use the 'ignore' button on here but it is not something I would ever use anyway as I feel that just because someone has an opposing view to you, doesn't mean you can't exhange info and ideas. :-)
Also for the record, I am a long term bull on the stock-market for anyone who thinks otherwise, but am simply bearish for the next one to two years, or even longer depending how bad things get.
atlunch, I know what you mean. My guess is spot iron ore prices aren't really shown publically as easily as other resources due to the long term contracts in place for many of the big miners/consumers IE China. So i find news articles are best places.
Google "spot iron ore prices" and you'll see they are down from about 200$ to $100 /t/CFR (cost and Freight) currently. This does not bode well for next years iron-ore negotiations. This coming from me, as you can see from my past, who was an ultra-bull on iron ore in my beloved little FMS, who I had to sell at a huge loss, but which is now way lower than when I sold (thank god)
Here's two great articles which explains why things are going to get a whole lot worse for iron ore and resources generaly: ____________________________________________ Sluggish demand and abundant supplies have brought Chinese mills to their knees as well. Four big Chinese steelmakers agreed to slash production by 20% last week. The grim demand situation was reflected in the spot market, with the price of Indian iron ore sold on the spot market in China tumbling to around US$95-US$100/t CFR (cost and freight), from up to US$200 a tonne in March. "Spot price usually sets the tone for benchmark price negotiation," Societe Generale said in its quarterly research note. "With spot prices trading at a discount to Brazilian and Australian iron ore the risk is clearly on the downside for next year." Steel mills in China asked Australia`s Mount Gibson Iron Ltd to delay some iron ore shipments last week -- a strong indication of China`s fading demand. Freight rates tumbled. "This was the first year in many, where the supply growth exceeded demand and that`s why the spot prices sank," analyst Jim Lennon at Macquarie Bank said. ________________________________________ http://www.mining-journal.com/Breaking_News.aspx?breaking_news_article_id=5118
And this from The Australian: _______________________________ AUSTRALIA is likely to confront a balance of payments crisis next year as the commodities boom ends with a crash.
Around the world, nations with current account deficits are being punished by markets. Australia will be swept into the contagion, which is likely to choke business funding and force up market interest rates.
At present, the banks are having to roll over about $75 billion in short-term foreign debt every month and raise a net $5 billion in new foreign funds.
Weakening export revenue will increase the volume of fresh funds that must be raised offshore every month, while growing difficulty in rolling over medium-term debt will increase the bank's dependence on short-term funds.
Steel is down from a peak of $1200 a tonne in July to $255 a tonne. Spot prices for coal and iron ore are already below the contract prices and are falling rapidly. Spot iron ore prices dropped 9.7 per cent last week.
This is consistent with the pattern of previous commodity booms in 1951, 1974 and 1979, each of which was brought to a halt by global recession, which resulted in prices overshooting on the way down, dropping below the marginal cost of production for the upper quartile of producers.
Resource export volumes are also coming under increasing pressure as a result of the credit crunch, as shown by the difficulties shippers into Korea have faced arranging letters of credit.
The 25 per cent of exports that are not commodities are also facing shrinking markets and difficulties in arranging finance. _________________________________________________
(20min delay)