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To: sammaster who wrote (264767)	10/27/2003 1:05:38 AM
From: mishedlo	Respond to of 436258

Unless it is pegged in euros M

To: sammaster who wrote (264767)	10/27/2003 8:12:03 PM
From: Mark Adams	Respond to of 436258

I'm suggesting take the thinking a few steps further. BHP had a press release today; Currency moves to cut BHP Billiton Q1 profit The rise in value of the Australian dollar and the South African rand will cut the first-quarter profit of BHP Billiton Ltd/Plc (ASX: BHP)BLT.L, the world's largest diversified miner, analysts forecast. au.dailynews.yahoo.com I've seen much the same earlier this year from WMC, an Australian producer of Nickel and Copper. Profits depressed despite higher nickel prices due to the strength of the Australian dollar. Imagine the Brazilian Iron Ore producer. He contracts with China to sell Iron for USD$/ton. He pays his workers, fuel suppliers, and shippers in Reals. If the Real climbs against the dollar (the dollar falls) then his costs climb relative to revenues. Unless he's hedged, his profit margin is squeezed. If the fall is abrupt enough, or far enough, he may have losses. And I doubt anyone hedges currencies beyond a year or two. cached: Friday September 26, 6:42 AM Brazil's CVRD Signs Contracts For Iron Ore Sales To China SAO PAULO (Dow Jones)--Brazil's Companhia Vale do Rio Doce SA (RIO) has signed several new contracts with steelmakers in China, including Maanshan Iron & Steel Co. (Q.MIS), in an effort to lock up sales to the world's fastest growing market for iron ore. CVRD's top executive Roger Agnelli recently returned from a visit to China - having signed contracts with roughly eight new clients, a CVRD spokesman said Thursday. Each contract stipulates the purchase of about two to four million tons of iron ore annually over the next three to ten years. CVRD declined to say whether the contracts would increase its sales to China, which totaled 10.2 million tons of ore over the first half of this year. Most important, the spokesman said, was that clients in China who had been buying more on the spot market were now making a medium-term commitment to take ore from Brazil. CVRD declined to name any of its new clients aside from Maanshan. The Brazilian miner already has a 20-year contract to provide ore to Baosteel. CVRD, the world's biggest iron ore miner, is currently producing at full tilt thanks to strong demand centered mostly in China. The company won a roughly 9% price hike from major clients this year. -Andrea Welsh, Dow Jones Newswires; 5511.3145.1481; andrea.welsh@dowjones.com