weak china steel demand will continue! , page-40

crazy

there's nothing wrong with your thesis that fe price is under pressure over the medium term.

my post said as much. it doesnt look like you understood my point though.

fmg at 4.35 was trading at a significant discount to its peer group given quality of earnings.

so what you had was a stock that was cheaper than it should be - but in sector on a sliding earnings trend

that meant short term it will likely pop on its stock specifics - and i think it will see $5 again in the next month or two as chinese still mills start restocking after this unwind.

but the trend to fe price is still to go lower medium term.

if you want to look at the stock as a longer term investment - then the question i think is really whether european growth will come back next year allowing china to export steel goods again.

if not - and steel demand continues to be primarily domestic - then citi;s $90 long term fe index price looks likely.

but that could take 12 months or 3 years - who knows? spot prices shift around a lot. we need more time to see what real trend price action looks like i would have thought.