Which IO Co is best positioned to recover?, page-29

A few things I take into account rather than just blindly look at foreign exchange pricing. I don't pretend to understand the mechanics on the IO spot since it is not a heavily traded commodity like gold or Cu or Silver etc. My understanding is that it takes its direction from the perceived economic strength of the Chinese real estate as a whole and the policy changes of their Federal Govt shifting from fix income assets to consuming economy. I suppose they still have a few economic levers like bank lending ratio or just plain old money supply.

A drop in the AUD is inter-related to IO spot being our largest export by $$ terms so as the spot drops we are seeing the AUD drops too as foreign entities are thinking the exposure to growth should be emphasized back to US. NFP on Friday is leading the way for continued economic recovery in US and I say so far and will be reinforced month to month as more good news comes out of US. I know this is a simplistic view of the very complex inter-relationship but as you can see traders are buying anything USD$ against all the crosses and gold/oil/silver is getting the brunt of all that selling too in USD quote. It is with this view I think this time we will not see the 2013/2013 snap back that easily. The supply fundamentals have changed and even Vale is in danger to be left behind because of its higher cost component.

I won't be punting with any big $$ if I was bottom picking these high cost producers. Good luck holders.