high iron ore prices = fwl projects bigbucks

Hey Fellas

Its always important to focus on economic fundamentals. Keep things simple with all the public information we can get.

All the propaganda about the Chinese economy slowing is rubbish! They are still growing at 8+% GDP per annum.

They have just been destocking to reduce inventories that will match 8-9% GDO growth, instead of 12+% which is what we saw in Q1 2010, and is unsustainable! This is exactly what the CHinese Govt was trying to achieve.

Yet, with all this slowing in purchases, Iron Ore prices are back above $150US per tonne, which makes companies like SDL all the more viable!!! Bring on 2011 is all I can say!
http://www.steelguru.com/raw_material_news/Indian_iron_ore_prices_flares_before_extinguishing/159978.html

It is learnt that Fe 63.5/63 cargo deal was done at USD 155 per tonne with offers prevailing at USD 156 per tonne to USD 158 per tonne for 63.5/63% Indian fines.

As for Ferrast, the MPI becomes a very profitable exercise where their cash cost sits at $320 per tonne, and they sell the Merchant Pig Iron for 4 to 5 times Spot Fe 63% price. Which is sitting at $150 per tonne, just follow the link provided for 12th of August Spot Iron Ore Price.

Therefore 4 x $150 = $600 per tonne selling price less $320 per tonne cash cost = $280 per tonne gross profit.

$280 x 1Mt per annum prodn of MPI = $280,000,000 Gross Profit Per Year!!

AND THIS DOESNT INCLUDE THE HEMATITE DSO RESOURCE!!! As soon as FWL sources the finance, and the Chinese are desparate to find alternate iron resource, this share price will crack the 40c level!

Go you Good Thing!

I made a similar call on SDL back in March, that will crack 65c by Christmas 2010, and $2 by 2012, TTY 40-60c by Christmas 2010, and $1 by September 2011!

REMEMBER THE ECONOMIC FUNDAMENTALS! China and India are the key! EU and USA will only need to grow by 2% GDP per annum. China and India will be where Australia's Future Lies!!!