GREY:AXXDF - Post by User
Post by
greenandgoldon Sep 22, 2011 12:53pm
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Post# 19072443
Reason for Drop
Reason for DropAll iron ore stocks, even the majors, are down big based on comments by Rio Tinto's CEO about weakening market demand. The market is obviously very volatile and will move on anything, including a few words in an interview.
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Frankly, I do think the iron ore market's overheated and ADV would benefit from a bit of a cooldown. A modest decrease in the iron ore price could delay IOC's plans for an expansion to 50 million tonnes, and scotch the plans of some of the more capex-heavy juniors in the Labrador Trough. Alderon being relatively cheap to build can move forward and claim 8 to 16 million tonnes per year in rail capacity on the QNSL while other projects flounder, waiting for financing.
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ADV is the only project of serious size in Canada that can realistically be built for under $1 billion by 2014. I'd prefer the iron ore price fall a bit to put pressure on the $4 or $5 billion dollar projects.