See above a new CNBC video that makes an important point I’ve been driving home for readers. Now that iron ore has become a battle for market share, it is the relative competitiveness between companies that matters not a simplistic assessment of a falling dollar equals higher profits. Here is the UBS all-in break even chart for the cost curve:
FMG must get below Vale or others or it will be the one cutting production once the juniors die. This is another reason why it is Australia that must address its competitiveness across the board and not wait for the US Fed to do it for us by dropping the dollar, which simply lowers all of our competitors currencies as well.
Why FMG and the Minerals Council are not screaming for currency relief I do not know.
