Find below the iron ore chart for March 6,2013:
I still think the correction could run a bit further but we shall see.
Meanwhile, MB readers have marveled in the past at the sense of humour of the universe in the precisely apropos name of UBS iron ore analyst, Tom Price, and here he is:
Sorry, no, that is the other Tom Price, Rio Tinto’s Pilbara iron ore town. Here is the real Tom Price, courtesy of the AFR:
And here he is on a recent tour of the Pilbara:
Mr Price has this to say on iron ore this morning:
Strictly speaking we are bearish across pretty much all commodities including the ones that Australian producers dominate such as iron ore and coal. We’re bearish on iron ore over the medium and long-term outlook because we are not only just seeing an expansion in supply, we are also seeing supply diversify, which is a bad outcome for a commodity’s price. But iron ore prices have been so high for so long that the so-called barriers to entry for this industry have fallen and some of these new players have come in and are starting to deliver into the ma1rket – not just the majors; BHP, Rio and Vale. Game theory analysis would probably be popular among some of the big miners because they’re trying to work out what scale and what rate they should deliver into the market given the competition they now face. They’ve never really faced competition like this before, in the iron ore trade. The sorts of things you might expect to see over the next three, five, maybe 10 years are strategies that limit the amount of players coming into the market, now that we actually see demand growth easing.
Sensible chap, what!
So, buy little ore miners? Hmm, not yet. If I’m the big boys I’d knock ’em off as they get in trouble with price falls.
