Chinese producers get $$$ from Chinese government to keep people employed. Chinese government's main goal is to create jobs to prevent riots.
Chinese government crack down on property building to PREVENT RIOTS, because avg Chinese cannot afford houses. I know someone is very high government official in Chinese.
Think about it, 30 million people go to protest (out of 1.2 billion) is only a small tiny crowd, but that's more people than in Australia and very hard to control 30 million protesters from riots.
Rio Tinto always has been extremely optimism, even they predict will be below $100.
Marcus Padly on Inside Business said people falsely believe $100/t is support level because Chinese miners cost is $100/t. He said that's false, because Chinese government subsidize producers.
ROY and CAP their cost is around $60/t and have transport, their sp got smashed. ROY has 2 Bt+, cost $60/t, transportation and MC $14m (with massive cash). Similar to CAP.
I predicted without DSO, TFA will abandon that 500mt project.
Besides, with a bit of debt (to fund this new Fe project) you will need at least $130/t to make small profit.
ANY Fe company, I will stay away regardless of cost because your profit will be squeezed and with rising cost, and debt interest to pay.
Look at PRODUCER like MOL is trading BELOW cash-backing (they got more cash than MC value), and they're making some profit everyday. Their cost curve is around $88/t and is a PRODUCER NOW.
LCG Price at posting:
5.0¢ Sentiment: None Disclosure: Not Held
