Pete Wargent blogspot

PERSONAL COACH | PROPERTY BUYER | ANALYST

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Monday, 7 March 2016

Fortescue goes perpendicular (BOOM)

Shorts annihilated

With Chinese iron ore futures hitting limit up today in tearing nearly 5 per cent higher - Dalian iron ore hit $62.47mt - the market action today has been lively to say the least. 

Fortescue Metals Group (FMG) was up 26 per cent at one point, closing up by 23.7 per cent at $3.08.

8 per cent of the stock was sold short last week (ouch!).

Quite some recovery from an intraday low of $1.46 on January 27. 


A big lift in other miners too, taking the ASX to another two-month high.

BC Iron (BCI) closed up by 52 per cent, Atlas (AGO) closed up by 46.7 per cent, and Arrium (ARI) closed up by 33.3 per cent.

Futures point to record gains

Iron ore futures screamed up by 19 per cent on Singapore exchanges, while a 62% Fe MNP (at seller's option) trade at $63.50/t implies that today is shaping up to see the biggest percentage gain in iron ore spot prices since indexation commenced.

All jolly good news for Australian Government revenues, given that forecasts made in December assumed just $38/t.

Oil also jumped to $39 for the first time in 2016, sending oil stocks rocketing.

Commodity prices rebounding anew.