So we've had results from Rio
Tinto Full Year Results , BHP
Billiton PLC Results for the Half Year Ended 31 December 2013 and today Fortescue
Metals (FMG-ASX) 2014 Interim Results.
What is a common theme is the increasing production and it appears no one is 'worried' about an over cooked super cycle which may be forced to change direction earlier due to massive oversupply. This isn't likely this year, but as increased production comes online even allowing for Rio's scaling back (Slightly of production) its still getting to a point where it will force a re-correction in the Iron Prices. I'm avoiding the provision of a chart to show this, as parties should do their own homework. However the price in my view is now becoming toppy as a result of over supply and lower than expected Chinese Growth.
This also has an impact on Australia with an overcooking (perhaps cooked) Housing Market, massive reliance on exports to China and the revenues associated with that but more importantly is likely to cause a contraction in Australian Property prices...and the knock on banking issues that will cause.
The Chinese Growth will also have an impact on the "Chinese" Bonds and local Government Debt. The expansion of Cities and Companies with Development Grants is fracturing global markets, as evidenced by the Solar Wafer Crisis that has taken near 4 years to recover and still in the throws of higher costs, low production and low wafer prices, albeit increasing nowhere near where they were at the peak. The expansion of production with almost blank cheques has been ignored by investment companies on the whole. The story of the 'Renewable Energy Corporation' would adequately cover the history of the entire sector when read in conjunction with Chinese Solar Company's defaults that I covered previously.
As requested: List
of All Listed Companies (Spreadsheet of all listed companies).
Have a good week, I have a mosquito bite on my nose that is akin to a second head! The question is, will it double my intelligence. Any name suggestions welcome...
Fraser
ReplyDeleteI agree that the iron ore price is in an interesting phase at present- some have predicted doom and gloom ($70 in one case for 2015/6) and at $124 presently it is the most profitable metal for RIO and many other miners, which seems a bit toppy even for me. The RIO Pilbura announcement a few months ago seemed to put a shot across the bows of anyone thinking of new greenfield devs in the near future, so my calcs show that some of the expected prod for 2016/17 has now been put back which I believe should help to support the price even with the expected Chinese slowdown. Iron ore is all about global growth, so the Fed and the Chinese will have a direct influence in its price over the next few years. Im expecting the global economy to be two steps forward, then one step back over that period, but I feel that the iron ore price is likely to stay above $90 under most of my poss scenarios.
RIO are v low cost on iron ore and the mgmt. are sound and realistic, so they are my main play in this field.
How low do you see the iron ore price going ?
Cheers. The Leggie
I think the interesting time will be when we forget about the "global" crash of yester year to that when China comes unstuck printing all this money to keep 10% growth afloat. (Apparently 4% would be perfectly sustainable but the no one seems to want a meager 4%!). Just keep your eye on the default non payment rate, it will hit eventually.....
ReplyDeleteI also note the Russian scapegoats will start to appear come Monday onwards given the vast amounts spent for Sochi and a whole load of unfinished buildings (I'm sure their will be a few twitchy sphincters from those "lower" down in the political scene and possibly some of the more well "heeled" will be booking flights out shortly. London here we come...
I am slightly perplexed also on earnings and the FTSE level at 6.8 but then I thought that at mid 5`s it didn't merit it....however, I am no genius, but all I currently see is consumer spending driving the UK economy, not a whole lot more.
So here I am, just positioning myself for that day, when everyone else is out buying cars etc, I`m busy....not !
Interesting times...
Steve
CHL- here we go!
ReplyDeleteCHURCHILL MINING PLC
("Churchill" or "the Company")
Timing of jurisdictionalruling in the international arbitration claim against the Republic of Indonesia
Temporary suspension
Churchill (AIM: CHL) wish to advise that its lawyers, Quinn Emmanuel Urquhart & Sullivan, LLP have been provided with notice of the ICSID tribunal's intention to issue its ruling on the Republic of Indonesia's jurisdictional challenge to the treaty claims raised by Churchill and Planet Mining Pty Ltd, on 24 February 2014.
A temporary suspension in trading of the Company's shares on AIM will take effect from 7.30am on 24 February 2014.
Restoration of trading will take place following the Company's RNS notification of the tribunal's jurisdiction ruling. The Company will release its notification as soon as possible after the ruling is received and the outcome has been established.
Oli