http://www.intelligentinvestor.com.au/2014/07/time-buy-iron-ore/
In summary, I agree with the fact that seaborn supply of iron ore will continue to increase, due to the companies, such as BHP, RIO and FMG trying to recover their capital, spent in the expansion of production. While some could argue that increasing production can increase companies' profit by selling more at lower price, it is extremely unlikely in the "perfect competition" iron industry, where every company will sell iron as long as it's above its cost line, especially in light of lagging demand.
This means without strong demand from China, increasing production from a lot of iron ore players (production should be evident in the coming reports from RIO and BHP) will accelerate the downward trend in iron price, until the demand and supply is balanced again. Under price-cutting competition, most likely, only the firms with low production cost will be profitable, while other higher cost firms, such as AGO, FMG, BCI will have to cost-cut further or stay idle until the market is profitable again.
We could be talking about 1 years or perhaps 5+ years. Be careful with the time horizon, you are looking at, when investing. I would not invest, if I knew it would take another 2 years, before FMG is profitable again, because a lot of things could happen in between.
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