AGO 0.00% 4.5¢ atlas iron limited

IO balanced: Even majors need to pay debt being heavy on IO

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    IO balanced: Even majors need to pay debt being heavy on IO.

    All in opinion:
    With bearish media streams still rehashing the same old supply focus iron ore stories as the ST IO bear trend bottoms and Iron Ore returns into its LT yearly bullish upward technical trend from historical decade lows back in 2015-2016 let me remind the experts who again seem to be focusing on China and not on the rest of the world. Eg India, SEA, US and rest of the world coming out of the GFC doldrums.

    Points
    Vales profits down and disappoints as their views are supply and demand are in balance. (Upside to IO demand and prices)

    Can't see the Iron price sinking further as the majors still need healthy profits to pay off their debt and keep shareholders happy paying dividends. Atlas is net debt free and looks rock solid in this balanced Iron Ore climate with hedging in place to water down IO volatility and diversication options to become a better more agile producer.(Upside to IO demand and prices. Further upside for net debt free producers eg Atlas.)

    India
    Indias miners have warned a 80 million tonnes iron ore deficit lease extension delay which means India:
    1. Will rely on better quality imported iron ore to fuel their rapid urbanisation needs. Why run mines at a loss when they can import better ore? (Downside to supply. Upside to IO demand and prices)
    2. Ramping up smart cities (China Mach 2), will become even more dependant on (Vale/Aussie) imported iron ore just like the rest of the world eg China and US to be. (Downside to supply. Upside to IO demand and prices)

    China
    3. China will cull more domestic producers who are loss making and polluting. (Downside to supply. Upside to IO demand and prices).

    US
    4. A high probability US will most likely use imported Australian Iron Ore to fuel its infrastructure. (Upside to IO demand and prices).

    In summary, IOs future is looking good indeed. A shame the experts are still focusing on yesterday's downside. Some financial houses in my eyes will lose out sitting on the sidelines holding dearly to yesterday's downside news and not backing the emerging growth story. They will be the ones with egg on their face while smirking.
 
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