sad state indeed. 1. My hunch is that if I built a chart of...

sad state indeed.

1. My hunch is that if I built a chart of prices and Shagang off-take volumes, the lines would be inverse.  Big volumes at low prices; low volumes at high prices.  I have no doubt that Shagang's shareholding is nothing more than a free call option on 65% Fe.  

2.  I also think that the need for a huge cash balance is about being able to weather soft Fe prices.  Basically, the thinking is that they can afford a period of low prices.  If I had a better handle on stand down costs, I might be more aggressive on this option should prices fall sub A$100.

3. It might pay to watch the fortunes of ASX:MGT. Shagang have expressed an interest in 2.0mtpa if they ever  got it off the ground

4. The year looks like it will end around 2.2 mt sold which is not a disgusting result.  I suspect this is the Chinese view also ...

5. I am bothered by the soft price and think it might reach the surreal levels of 17.5c ...

Have a great day