Extraigo algunos parrafos de un muy interesante analisis de SA sobre el IO y VALE:
There are two explanations why prices went up despite growing seaborne supply. First, more and more small mines in China finally stopped production, and second, demand from Chinese steel mills remained healthy. Imports to China reached one billion tons of iron ore for the first time in 2016, a 7.5% increase over 2015.
With iron ore trading at $80, the earnings and cash generation potential of the four leading players is huge, and I believe the situation is not fully reflected in the share prices yet, despite the rapid recovery from the lows. All miners have lowered production costs and significantly reduced capital expenditures, so that profitability will continue to increase.
Cash production costs came down, and are now ranging from $13 to $15 per wmt (wet metric ton). Vale has become the lowest cost producer, but there is no big advantage or disadvantage for any of them. Vale's position will be further strengthened when the S11D mine ramps up, as it will be the asset with the lowest cash production costs worldwide. This development will help to compensate the transportation cost disadvantage which the Brazilian producer has in comparison to its Australian competitors which benefit from their proximity to the main customer China.
Of course, the key question is whether a price range of $70 to $80 is sustainable. At present, with Chinese imports at a record level, and the outlook of growing steel demand in other regions of the world (e.g. India and possibly a major infrastructure program in the US), there seem to be few reasons to worry.
With the exception of the S11D mine, there will be no major capacity additions near-term. However, Vale's new capacity will partly replace other operating mines which are producing at higher costs so that the net capacity addition is limited. In the middle of the race to the bottom, Vale was the first producer which signaled that it was willing to limit output to stabilize prices. Vale has given a new production guidance for the next years, and it is lower than earlier projections.
The question is whether stocks of iron ore miners still have upside potential after the nice run in the second half of 2016. My personal opinion is yes, but of course, the iron ore price needs to play along. If the commodity can average around $80 throughout the year, I consider the stocks as clearly undervalued, but even in a scenario where prices decline to $70 or at least $60, there is still upside potential.
I remain bullish for the sector and the mining industry in general. I count on a balanced market and on increasing free cash flows and higher profitability which are not fully priced in yet.
http://seekingalpha.com/article/4041164 ... of=45&dr=1
Lo del carbon lo venimos comentando hace un tiempito (hoy creo que habia comentado algo de eso a la mañana tambien). Lo del FCF se habia anunciado en el PPT de Noviembre, del VALE Day. Estos tipos son unos genios.
