Seeking Alpha

A 56% Q4 rally in iron ore prices has some declaring China back and the bear market in the key...

A 56% Q4 rally in iron ore prices has some declaring China back and the bear market in the key mineral over. The price at China's Tianjin port has reached $135.40/ton, well more than double the average cost of production in Brazil (VALE) and Australia (BHP, RIO).
Comments (5)
  • I've held Jan 2014 20 calls since last summer, and resisted selling with a paper loss. Now that I'm almost back even, and not sure how much upside VALE has left, any votes here to sell or hold further?
    28 Dec 2012, 02:37 AM Reply Like
  • hold on. the positive China news keeps coming and as long as that happens, these stocks go higher. right now the best looking stocks are the iron ore, coal names and industrials like Joy Global.
    28 Dec 2012, 04:30 AM Reply Like
  • Jim Chanos , who is probably one of the best investing minds out there is short the stock . Also David Einhorn is also short iron ore.
    So you make the call.
    Also i am sure both of these guys have the share of losses as well.
    And lastly does china really need that many more empty cities.
    I will also will never forget the saying that the markets can stay irrational longer than i can stay solvent.
    28 Dec 2012, 08:50 AM Reply Like
  • I'd be concerned about continuing meddling and tax problems from the Brazil government. I'm in the same boat with you with VALE. Not sure if I should get out after a relief recoup in losses.
    30 Dec 2012, 09:47 PM Reply Like
  • Since it broke the 200-day MA on 12 Dec, it has spent about 11 sessions above it, and has not dipped much below my strike price (20) in the last eight sessions. Meanwhile the broader markets have declined. This indicates, to me at least, continued short-term strength. Nevertheless I placed a sell stop order on my options at this point and will let the market take me out if that gets breached. Thanks for the responses.
    31 Dec 2012, 03:05 AM Reply Like
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