1. On average, the cost of producing iron-ore in Australia is $30/t, compared with $40/t to $50/t in West Africa and $90/t in China. According to Bloomberg, around 70% of Chinese iron-ore output is uneconomical at prices below $96/t.

2. According to the World Steel Association (WSA), global steel production was down by 4.7% in July this year and 0.7% during the January-July period of the current year compared with a year ago. However, this is not just a Chinese phenomenon. Steel production fell in four of the five top steel-producing nations—China, Japan, the US, and Russia – during the January-July period of the current year. India was the lone exception, recording a 7.2% positive growth in steel production during the same period over a year ago.
   Iron ore is a very structured industry. The big four – BHP, Rio Tinto, Vale and Fortescue – control the market. Experts believe the way Opec does not flood the market, big four iron ore miners also won’t flood the market with excess production if there is insufficient appetite.

3. Iron ore (62% Fe content) prices at Qingdao Port are currently hovering below $100/tonne, around $88/tonne as of August 16, marking the lowest level since November 2022, with the year-to-date average in 2024 thus far being $109/tonne, as per BMI data. Weaker iron ore prices have also cumulatively wiped out $100B in market cap from the world’s big four iron ore producers – BHP but analysts say the top global miners probably will be disciplined to prevent iron ore prices from collapsing too far.
   Over the long term, however, the brokerage expects iron ore prices to follow a multi-year downtrend, with prices forecast to decline to $78/tonne by 2033.

Source:

1. Global iron-ore production growth to accelerate – BMI (miningweekly.com)

2. Iron ore prices tumble on Chinese demand slump, outlook mixed (msn.com)

3. BMI cuts iron ore price forecast with no respite from Mainland China demand woes (msn.com)

One observation I made recently. When I change my screening criteria to sharpe return of 3 months , I get stock list of such stocks which is quite different than when i select 6month+12 month sharpe returns. I compared the charts under both categories and I realised that when i select only Sharpe return of 3 months I get stocks like India Glyco, Gabriel, sardaen, Dodla, etc who has recently broken out in last 2-3 months, but the problem is that their charts are too volatile and non-secular with very high drawdowns…While in 6+12 month sharpe returns , charts are very secular with consistent performance with non volatile and small drawdowns if at all… Also those stocks which come under 3 months , also come under 6+12 , but at lower ranks like beyond 30 and all. @visuarchie , if you could comment on this observation…pls

Alan Watts is the gem of a writer. Have read one of his book called The Way of Zen

Is all of the capex coming into elevator division or is it part elevator and part steel polishing division?

These are my own views to provide a balanced perspective.