At this point, it is difficult to concentrate on anything other than iron ore. Yesterday, it reached US $ 230 per ton in China.
It’s an amazing practice. Iron ore stocks soared yesterday. It will surely be fun today.
However, it is worth remembering that iron ore is not a cryptocurrency. It cannot be done forever without real-world results.
Eventually, the cost of putting the steel mill will be too high and the bid will go down. At what point does it happen?
Your guess is as good as mine at this point.
Iron ore inventory outlook
It’s also hard to say how much speculation is happening on iron ore futures and what percentage is real demand.
However, China’s steel margin is high. Therefore, it is not unreasonable to think that the price may still exceed US $ 200 for some time.
Remember, this is also a supply issue. Few new iron ore mines have been in production in the last few years.
As a result, existing producers can get cash while they are on track.
Rest assured that at these prices, anyone with a lease and decent resources is competing to meet the market. Currently, there are many iron ore juniors doing so.
Bold forecasts of Australian real estate professionals in 2026. Please read the details.
As always, the problem is: Are you a trader or a long-term investor?
Take a project called Razorback from a small iron ore junior called Magnetite Mine.
They have huge iron ore resources in South Australia. The company is run by a respected iron ore industry veteran.
The catch is that it will not be produced until 2024. Would you dare to invest today’s price when you don’t see $ 1 in earnings for three years?
You can make an excellent case for it … if you have a stomach for a dip and down period along the way.
After all, the steel industry is unlikely to disappear soon.
We know that over the next five years, huge infrastructure spending can occur around the world.
And think about your journey Fortescue Metals Group Ltd [ASX:FMG] From the last iron ore boom to today.
It closed at $ 24.79 yesterday from a nickel minnow — billions of dollars were paid in dividends along the way.
Why doesn’t this happen again?
I’m not saying that the magnetite mine will be the next fortescue. Only fortune-tellers know such a future.
However, it is worth considering the idea that the current iron ore boom is not a “spike”, but a period of structural undersupply that can take years to find balance.
Markers indicate that you are thinking wrong. Most forecasters predicted that at least a month ago, iron ore would peak in China’s summer and begin to lose steam later in the year.
The ripping movement in the last few sessions has wondered if the party will last until the end of the year.
I understand. However, iron ore will have to retreat all the way to stop juniors from proceeding with their activities.
Anything over US $ 150 has money for almost everyone.
Of course, there are also restrictions on real-world aspects such as truck drivers, staff, and access to the harbor.
This suggests that Western Australia will begin attracting workers from all over the country as long as it can clear borders and COVID checks.
Earlier wage inflation
Wage inflation must manifest itself in a constrained market where so many resource sectors are absolutely flying.
Goodness knows that iron ore isn’t the only thing to rip. Copper is also absolutely roaring. In recent transactions it is almost vertical.
I, oh, Australia will be booming in the next few years. Think about the benefits that can also be brought to your home.
I read yesterday about a Bitcoin trader who just bought a $ 13 million home.
As predicted here on these pages, crypto profits will supercharge this housing cycle.
You may have heard of the huge surge in Bitcoin. Currently, its fellow crypto Ethereum is also skyrocketing.
We could hear about Ethereum millionaires as well as Bitcoin’s.
It’s a boom, a baby, a boom, no matter where you look.
nice to meet you,
Editor, Daily Reckoning Australia
PS: Don’t forget to check out the latest presentations from colleagues Ryan Dinse and Greg Canavan. One of the things I’m tracking is the penetration of cryptocurrencies into the housing market.
Ryan and Greg are begging everyone to hear that crypto is pervasive in everything. Go here and see what they are saying right now.
Boom, Baby, Boom, Anywhere — Iron Ore Inventory Outlook
https://www.dailyreckoning.com.au/boom-baby-boom-everywhere-iron-ore-stock-outlook/2021/05/11/ Boom, Baby, Boom, Anywhere — Iron Ore Inventory Outlook