Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (73242)	4/17/2010 3:42:10 AM
From: Snowshoe	Read Replies (1) of 74559

>>What the heck is happening here?<< It's the greedy self-defeating Australians and Brazilians! They jacked up the price of seaborne iron ore so high that the market can't bear it. They're forfeiting their competitive advantage to domestic steel mills with a local source of supply... US Steel Makers Priced Far Too Cheap, Says OptionMonster cnbc.com This means that the worm has turned, and instead of foreign automakers and steel makers benefiting from a locked in price that quite simply was ludicrously low, the prices are rising more dramatically and thus squeezing foreign steel makers and their customers. Iron ore miners have pushed the price of ore upward to more than double its '09 level of $68 per metric ton. I show Q1 of 2010 iron ore prices were between $100 and $110 per ton, but that looks cheap versus the spot, which is now over $150 per ton before freight! So here is my pitch as to why US Steel makers are priced far too cheap and should be one of our focus areas until and unless the the whales are forced to change back to the old system. This is the price changing structure only affects iron ore sold as seagoing cargo! Since American steelmakers operate their own iron mines or can purchase from the largest remaining North American iron ore miner, Cliffs Natural Resources.

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