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According to cme group futures now above $85/t out to the end of next year. :-)
https://www.cmegroup.com/trading/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures.html
Probably a little higher after today's (China's evening) session.
DCE night session (start of next day) finished around 2% up off a previous flat session, meaning the spot is now likely nudging $120/t :-)))
http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2020-08-05 117.15 125.65
2020-08-04 117.35 125.95
2020-08-03 116.25 125.25
2020-07-31 111.75 122.75
]===
DCE held last night's gains :-) September delivery (currently the most traded month) up 2-3%.
The deal has to work for all parties. The lenders will end up with nowt until the little guys are paid. Anyone know how many local people /companies are affected? It will come good for them in the end, just hope we are a part of it.
Indeed. Indeed. @Cause :-) Although there is a possibility, which we are unaware of if it is the case, that there is another deadline the court has set related to striking a deal with the banks: if we are unable to strike a deal by a certain date (perhaps a date that has not even been declared yet) the courts may make a ruling on the banks secured credit, perhaps demoting it to unsecured status as they threatened with the end of June deadline, which came and went when the courts could see progress was being made with the negotiations, an offer being made a few days later. I guess it will depend on how serious the courts deem their offer to have been? amongst other factors. Regardless, we should see ore shipping soon with or without a deal with the banks - I think the market will like that. :-)))
@Obs - Each side tries to get the best out of the deal for themselves but ultimately compromises...even though the ones I had the chances to see, they weren't this complicated, ultimately it has to benefit both parties or won't happen. If you want to push all the risks to one party then it just falls flat and personal opinion is it won't reflect well on either party if they are the ones wanting to have the cake and eat it...
Hopefully it works..
@maddog and @mrcautious - the deal going through and it going sour are both possibilities. The delay doesn't look good.
The upside is, JRP has been upheld in the latest ruling. So no contesting that. Shipment will happen although there won't be any revenue (I don't know if they will book it as revenue) to KDNC out of it but it is still movement. But if small creditors are paid for, the courts interest in this drops a bit or the bigger carrot is the local economy?
The other side is there is no agreement between the banking group and Dev and it goes back to court and takes a even longer.
I just wish there is some snippet into the whole negotiations (there was no indication of the counter proposal on the RNS and it was only known to us through court ruling). For what is is worth, there was a multi billion buy out recently in an european market that took even the people who were in that industry by surprise. I knew some of the people in discussions with the firm that was bought out/going to be bought out, on another matter but they had no clue as to what was to happen. I guess sometimes they prefer all this to be kept behind closed doors. Though I wish to have some indications on this.
Hopefully it works out. I obviously don't have as much experience as you guys on this but for better or worse, in this to see what happens I guess and hopefully good things will happen to make everyone happy.
cause / l would like that two but there's a but and that but is time " the bods said that ever think was in hand done & dusted so what has happened " l have traded business for more than 30 years you name it l have brought it from takeaways to units to factory's even hotels so l do no the ropes and my guess if we get anything it wont be any were near what is been branded on this board our partners are to bigger fish to allow that to happen " Cause l would love to be wrong but history is hard to change in the business world.. G/L & keep safe every one even KM
Obs & cause -- sorry I am in agreement with maddog on this. I too have seen very many business deals as a former sales director and this has all the hallmarks of something that may be going pear shaped and all of the team ramping in the world wont change this if it is on the cusp of happening...
Indeed @Cause. If we capitulate some of the recent gains to the iron ore price to the the banks then they better be prepared to take on the downside should the prices fall over the next year or two. That's how negotiation works right? Win-win. Lose-lose. ;-)
@maddog - Someone is very defiant. lol. Hope you are doing well.
As for the deals being negotiated, I have seen deals, that were in the end completed successfully, being negotiated back and forth for year or two before conclusion. I've seen "it will be signed this month" end up being signed few months later. Personal experience. Even smaller ones, I have seen numbers being negotiated and then when it is agreed by the negotiators, getting turned back to the negotiation table because the numbers have changed then a compromise being reached.
Hopefully it is a case of that.
no
are you kidding every one , 6 weeks ago all party's should of presented a agreement to the courts 4 weeks ago the courts tuck control " and in the last 4 weeks on rns , as mike ashly would say a deal with all the paper work at hand should complete with in 7 days after that it most likely will not be a deal going forwards only backwards the way it looks we only have a 10% chance of any deal coming off,
Strong close to the evening session! Up 2-3% (~2 off the day's close, ~3 off the settle). This is counted as the start of the next day - let's see if it holds!
Now let's get that ore shipped and sold for September delivery! :-)))
continuing to rise in the evening session...
Wow, the spot breezed past $115/t!
http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2020-08-03 116.25 125.25
2020-07-31 111.75 122.75
2020-07-30 110.95 121.95
2020-07-29 110.75 121.85
2020-07-28 107.95 118.85
2020-07-27 107.75 118.55
2020-07-24 109.35 120.15
]===
LoL @Frankie. The baseline iron ore price used in the Judicial Recovery Plan was Fe 62% $61/t and Fe 65% $80/t, and this showed that the project was able to be profitable whilst paying off its debts. The current spots are probably in the region of $115/t and $125/t respectively. If all else is equal, an increasing price doesn't impact on capital or operational expenditures so it is simple enough to see how the earnings before taxes and the like are deducted, the EBITDA. An increase of $45/t at full production capacity of 5.3Mt/yr would increase the EBITDA by:
$45/t * 5.3Mt = $240m per annum.
If we held 27% of the JV company at the time that would equate to *additional* pretax (and the like) revenue flow associated with our holding of $65m a year. If we held 49% of the JV company it would be $120m. Both heavily rounded.
The company has previously estimated that the EBITDA off Fe 62% $61/t is $136m per annum. You could add this to the $240m, but a lot of the original EBITDA is earmarked for paying off Capital Expenditure loans (including our $6m and potentially $24m back to the JV), as well as historical debt.
It's very exciting: hopefully the scoping study will include sensitivity studies up to at least today's spot prices!
Ob.
Always nice to provide a link. Found one! ;-)
"China steelmaking ingredients futures prices rise on strong demand" (AUGUST 3, 2020)
https://in.reuters.com/article/asia-ironore/china-steelmaking-ingredients-futures-prices-rise-on-strong-demand-idINL4N2F50Q5
===[
Dalian iron ore jumps more than 4%, coke hits 12-month high
...
Iron ore’s September contract on the Singapore Exchange climbed 2% to $108.08 a tonne.
]===
This likely moves the seaborne 62% spot closer to $115/t than $110/t :-)
Just noticed iron ore futures on the DCE closed 3-4% up this morning! :-)))