http://www.beowulfmining.net/11-10-19%20Iron%20ore%20market%20report%20update%20October%202011%20Beowulf%20Mining%20plc.pdf Is a research report for a norwegian iron ore mine, giving a price outlook Demand is considered to be Asia so they net back to Norway FOB from forecast china prices Their price outlook gives a range of FOB Norway price, $US/t This includes a price premium for 68% Fe, similar to 67.5%Fe from Richmond, but allows $40/t estimated sea freight cost Norway to China. The list below is their low/high forecast FOB Norway - I've then done a rough adjustment for FOB pacific coast US after that
Iron ore price outlook $US FOB Norway, low to high estimate 2013 ~128-146 2014 ~128-146 2015 fall to avg ~105-135 2016 fall to avg ~100-130 2017 on, fall to avg ~88-126
Adjustment for FOB US US sea freight LosAngeles-Shanghei distance is ~5700km, vs Norway-Shanghei 11,275 http://sea-distances.com/ Assume prorata for distance (5700/11275)*40=20.2 So differential in favour for US shipping estimate is 40-20.2=19.8, say 19 Add this to the above long run price forecast for Norway FOB this gives long term price forecast range for FOB Los Angeles 88+19=US$107 FOB to 126+19=US$145 FOB
and higher prices prior to that before all the new mines come on line
just one view on long term price
RHM Price at posting:
31.0¢ Sentiment: LT Buy Disclosure: Held
