From UBS comes its weekly update on where miner profit sit versus its reference scenario at $103 for iron ore:
Diversifieds: All else remaining equal, our BHP & RIO earnings estimates for CY 15 would be -19% and -21% (prev. -5% and -13%) respectively under a spot scenario. Nevertheless, RIO would trade on cheaper spot multiples at 11.7x CY 15E PE vs BHP at 14.0x CY 15E. Iron ore: The spot iron ore price is 18% below our CY 15 forecast, and implies a 65% downgrade to FMG’s FY 15E earnings and -736% to AGO.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
