271 replies to this topic

[McEdama]

Patiently waiting for it to get to -R200.00, Iron Ore droped further last night to 5 year low of $US78.60/Tonne, KIO will drop a further +3% today with no end in sight....

[M e r l i n]

Sugafoot I think 250 is very optimistic, it briefly traded almost there day before yesterday at it's low for the day, my gut says closer to 200-, remember the iron ore situation shall take several years to reverse.

 

 

I would take the money and pain now... The way things are looking for the iron ore market, there is allot of pain still to be left... We could even see KIO at 250 very soon... Don't be caught catching a falling knife

[Sugafoot]

This is depressing...

Tell me about it! Im in from R380, seriously considering just selling it and taking the loss. Whenever I think it can't get any worse it drops another 5%. I guess this is how lessons are learnt

I would take the money and pain now... The way things are looking for the iron ore market, there is allot of pain still to be left... We could even see KIO at 250 very soon... Don't be caught catching a falling knife

[M e r l i n]

Guys you have had plenty of warning on this forum from end of August - as my Afrikaans teacher used to say "Julle wil nie luister nie, julle moet voel" and proceed to give us cuts for failing a test.

[JLFB]

This is depressing...

 

Tell me about it! Im in from R380, seriously considering just selling it and taking the loss. Whenever I think it can't get any worse it drops another 5%. I guess this is how lessons are learnt

[MHB]

This is depressing...

[M e r l i n]

Peter, If you study the thread no one thought it would sink to 285, at 270 you are in dangerous territory but who knows where the bottom is, the trend is still certainly down from here but you are in uncharted waters.

 

 

@Merlin: Is it to late for a short on KIO?

[Peter01]

@Merlin: Is it to late for a short on KIO?

[M e r l i n]

272.50 and counting - heaven for shorts

 

Take a step back and incorporate economics into the discussion not just the surplus material available.

If you as a producer have millions of tons of product you wish to sell you WILL be forced to be price makers not takers.

By saying that what I mean is you WILL UNDERCUT your competitors just to offload your produce.

Every miner exposed to iron ore is going to suffer more pain.

ARM's results were pretty decent but their exposure to iron ore is too great a % of their overall basket.

KIO is a 1 trick pony namely iron ore....

To maximize your shorting opportunity also include Exxaro as they hold 20% of KIO so will be dragged down with.

I'm still short & adding again on the dead cat bounces till Dec finals.

 

For those who are in long I have been where you find yourself now & it sucks big-time.

Get out first retest of R300 & go get pissed for 2-3 days.

[M e r l i n]

The upside is you are getting good experience.

Good judgement comes from experience and experience comes from bad judgement.

 

Is there a bottom.

 

I'm sinking into an abyss

[Eagle7]

Is there a bottom.

 

I'm sinking into an abyss

[soutie]

Take a step back and incorporate economics into the discussion not just the surplus material available.

If you as a producer have millions of tons of product you wish to sell you WILL be forced to be price makers not takers.

By saying that what I mean is you WILL UNDERCUT your competitors just to offload your produce.

Every miner exposed to iron ore is going to suffer more pain.

ARM's results were pretty decent but their exposure to iron ore is too great a % of their overall basket.

KIO is a 1 trick pony namely iron ore....

To maximize your shorting opportunity also include Exxaro as they hold 20% of KIO so will be dragged down with.

I'm still short & adding again on the dead cat bounces till Dec finals.

 

For those who are in long I have been where you find yourself now & it sucks big-time.

Get out first retest of R300 & go get pissed for 2-3 days.

[M e r l i n]

From bad to worse, large new Brazilian mine shall commence in two years time, adding to the surplus of iron ore. see extract from http://www.mining.co...ve-years-93008/

 

So I take back my undertaking to get back in @ 285 on KIO

 

Barclay's Bank estimates that, assuming Chinese steel production grows at 5.1% per year, there will be a surplus of 79 million tonnes of seaborne iron ore this year and 67 million tonnes next year. UBS estimates a surplus of 74 million tonnes this year, with a possible oversupply of 267 million tonnes by 2016.

 

"Two years from now, Brazil will put … a big new mine into production. So in two years, you'll see again a pretty lumpy increase in output that will cause another slump [in] prices," he was quoted as saying.

"So, this volatility will continue as supply tries to catch up with demand and then overshoots again, but in the short term I think prices will be pretty stable, around the $90 mark."

[M e r l i n]

Mc E, forgive me for rubbing it in, you mention that Kumba will reach 380 in September  (as it always do) , which year did you have in mind or was it a typo - was it 280 you meant to say.

Currently trading at 307.42 

 

I took my punishment and bailed at 373.41 as I saw it coming.

 

This is a very volatile share, it goes up as quick as it goes down,

M e r l i n, you must have burned big time on this one, you are very negative on Kumba lol...

as for 280, KIO will never reach that level unless iron ore trades at sub $54.3/tonne which I doubt

This share will reach +380.00 again in September (as it always do)

This is a well run, profit generating busses which just concluded a 3 year wage deal, and pays good div.

My advise would be: if you're playing in the resources space, keep an eye on it, if not - leave it to us to ride these waves ;-)

personally I think this level is a bottom for this 'cycle'

[Procrastinator]

Google "Chinese ghost cities" I think if the resource players are looking for growth in demand out of China they could have a bit of a speed bump coming.

[McEdama]

From Bloomberg
Iron ore declined to the lowest level in five years on concern that the economic slowdown in China, the world’s biggest consumer, will curb demand for the steelmaking ingredient as the global surplus expands.
Ore with 62 percent content at the Chinese port of Qingdao dropped 0.7 percent to $87.70 a dry ton today, the lowest since October 2009, according to data compiled by Metal Bulletin Ltd. The raw material fell for a ninth day in the worst run since September 2013.
Prices slumped 35 percent this year, entering a bear market in March, as producers including BHP Billiton Ltd. and Fortescue Metals Group Ltd. (FMG) are expanding supplies, pushing the market into a glut. Global seaborne output will exceed demand by 72 million tons this year and 175 million tons in 2015, Goldman Sachs Group Inc. estimates. Concerns about the strength of China’s recovery have grown after data this month showed the weakest credit growth since 2008, an unexpected slowdown in industrial output and home prices slumping in more cities.
“What we’re dealing with is essentially oversupply from the major iron ore producers, from Australia in particular,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “They’re pushing too much tonnage into the market against a demand side that’s a little bit lackluster.”
 
Bloomberg reports that iron ore fell to its lowest price in five years today, while also reporting that Austria’s largest steelmaker, Voestalpine, says there is “still enormous overcapacity in iron ore.”
 
 
Only after production has been reduced to compensate for huge surplus shall I be a customer for Kumba, it certainly shall not be this year and maybe not next either.
 

Stock went ex div.
 
Relax.

Interesting read, I've read quite a few echoing the same sentiment the past couple of days, I've noticed the graph patern you referred earlier as well... Bleak outlook accompanied with Ex. Div status!

[M e r l i n]

From Bloomberg

Iron ore declined to the lowest level in five years on concern that the economic slowdown in China, the world’s biggest consumer, will curb demand for the steelmaking ingredient as the global surplus expands.

Ore with 62 percent content at the Chinese port of Qingdao dropped 0.7 percent to $87.70 a dry ton today, the lowest since October 2009, according to data compiled by Metal Bulletin Ltd. The raw material fell for a ninth day in the worst run since September 2013.

Prices slumped 35 percent this year, entering a bear market in March, as producers including BHP Billiton Ltd. and Fortescue Metals Group Ltd. (FMG) are expanding supplies, pushing the market into a glut. Global seaborne output will exceed demand by 72 million tons this year and 175 million tons in 2015, Goldman Sachs Group Inc. estimates. Concerns about the strength of China’s recovery have grown after data this month showed the weakest credit growth since 2008, an unexpected slowdown in industrial output and home prices slumping in more cities.

“What we’re dealing with is essentially oversupply from the major iron ore producers, from Australia in particular,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “They’re pushing too much tonnage into the market against a demand side that’s a little bit lackluster.”

 

Bloomberg reports that iron ore fell to its lowest price in five years today, while also reporting that Austria’s largest steelmaker, Voestalpine, says there is “still enormous overcapacity in iron ore.”

 

 

Only after production has been reduced to compensate for huge surplus shall I be a customer for Kumba, it certainly shall not be this year and maybe not next either.

 

Stock went ex div.

 

Relax.

[ThatBlackGuy]

Stock went ex div.

 

Relax.

[M e r l i n]

Iron Ore price at a 5 year low and counting

 

 

Yes it is like a slow puncture...

[Zero Hedge]

Yes it is like a slow puncture...