What's Priced In? Sensitivity of the Major Iron Ore Miners to Higher Prices

Ambitious Lawsuit Against Samarco and BHP Billiton

BHP Billiton's Heavy Investment Through the China Boom Has Diluted Returns and Destroyed the Moat.

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Thematic (Sector/Industry)

Saudi arabia Materials / Thematic (Sector/Industry)

After an initial tantrum, the market is now upbeat at the prospect of a Trump presidency, particularly for commodities and commodity producers. Trump says he will boost U.S. economic growth to 3.5% per annum, cut taxes and regulation, lift restrictions on energy investment--particularly for fossil fuels--and end offshoring. There are some left-field ideas too, particularly around trade and protectionism. The most important policy for commodity producers is the promise to invest $1 trillion on infrastructure in the next 10 years.U.S.-based steelmakers are likely to benefit. Trump says he wants the steel for backbone of the infrastructure to be American. We expect U.S. steel makers to benefit from both higher volumes and margins, with unit costs to benefit from increased plant utilisation. Some of the benefit is likely to be passed on to the price of raw materials-- scrap and U.S. domestically produced iron ore and coking coal.We do not expect a meaningful change to global demand for commodities given the small role that the U.S. plays in a China-dominated market. As such, we do not plan any changes to our price forecasts for iron ore, met coal, thermal coal, or uranium. We maintain our fair value estimates for almost all our global mining coverage (BHP, Rio Tinto, Fortescue, Vale, Anglo American, Glencore, Teck Resources, and Cameco).Analyst: Mathew Hodge &amp; David Wang

After an initial tantrum, the market is now upbeat at the prospect of a Trump presidency, particularly for commodities and commodity producers. Trump says he will boost U.S. economic growth to 3.5% per annum, cut taxes and regulation, lift restrictions on energy investment--particularly for fossil fuels--and end offshoring. There are some left-field ideas too, particularly around trade and protectionism. The most important policy for commodity producers is the promise to invest $1 trillion on infrastructure in the next 10 years.U.S.-based steelmakers are likely to benefit. Trump says he wants the steel for backbone of the infrastructure to be American. We expect U.S. steel makers to benefit from both higher volumes and margins, with unit costs to benefit from increased plant utilisation. Some of the benefit is likely to be passed on to the price of raw materials-- scrap and U.S. domestically produced iron ore and coking coal.We do not expect a meaningful change to global demand for commodities given the small role that the U.S. plays in a China-dominated market. As such, we do not plan any changes to our price forecasts for iron ore, met coal, thermal coal, or uranium. We maintain our fair value estimates for almost all our global mining coverage (BHP, Rio Tinto, Fortescue, Vale, Anglo American, Glencore, Teck Resources, and Cameco).Analyst: Mathew Hodge &amp; David Wang

Inner Mongolia Baotou Steel Union (600010 CH)

U.S. Steel Makers to Benefit From Trump Stimulus but Market Draws Long Bow With Optimism for Miners