Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Kelusa Asia Focus Funds

Equity Bottom-Up

It's been a roller coaster ride in iron ore this year.  Up 59% from January to a peak price of 70$/ton on April 21st followed by a 30% drop in May.  We've finally taken a breather for a week but stocks are quickly rallying into this short breather even though the underlying still continues to remain weak. First, let's look at how Fortescue ( FMG ) and iron ore have tracked each other until recently.  The correlation has been very strong till late May when iron ore prices fell but since then FMG…

It's been a roller coaster ride in iron ore this year.  Up 59% from January to a peak price of 70$/ton on April 21st followed by a 30% drop in May.  We've finally taken a breather for a week but stocks are quickly rallying into this short breather even though the underlying still continues to remain weak. First, let's look at how Fortescue ( FMG ) and iron ore have tracked each other until recently.  The correlation has been very strong till late May when iron ore prices fell but since then FMG…

Fortescue and Ore Price, Interesting Divergence

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Temporary tightness should abate as demand falters and supply surges.<ul><li class="p1">Iron ore prices have surged to $69 per tonne, up 23% from last week and continuing their recent upward trend from a bottom of $37 per tonne in December.</li><li class="p1">Leveraged mining stocks are also up by double-digit levels this week, having already more than doubled since February.</li><li class="p1">We think this rally is unsustainable, as it is based on short-lived demand measures and near-term supply disruptions.</li><li class="p1">As temporary tightness in the market abates, iron ore prices should fall by more than half to $30 per tonne in the long term, driven by falling Chinese steel demand and rising scrap availability.</li></ul>Analysts: David Wang, Daniel Rohr and Mathew Hodge

Temporary tightness should abate as demand falters and supply surges.Iron ore prices have surged to $69 per tonne, up 23% from last week and continuing their recent upward trend from a bottom of $37 per tonne in December.Leveraged mining stocks are also up by double-digit levels this week, having already more than doubled since February.We think this rally is unsustainable, as it is based on short-lived demand measures and near-term supply disruptions.As temporary tightness in the market abates, iron ore prices should fall by more than half to $30 per tonne in the long term, driven by falling Chinese steel demand and rising scrap availability.Analysts: David Wang, Daniel Rohr and Mathew Hodge

Australia

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4, 72.4% Fe), hematite (Fe2O3, 69.9% Fe), goethite (FeO(OH), 62.9% Fe), limonite (FeO(OH).n(H2O)) or siderite (FeCO3, 48.2% Fe).

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Iron Ore (IRON ORE COMDTY)

Fortescue and Ore Price, Interesting Divergence

It's been a roller coaster ride in iron ore this year. Up 59% from January to a peak price of 70$/ton on April 21st followed by a 30% drop in May....

Sameer Taneja

Iron Ore Rally Unsustainable

Temporary tightness should abate as demand falters and supply surges. Iron ore prices have surged to $69 per tonne, up 23% from last week and...

Morningstar, Inc.

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