Oil joins the Iron-Ore & Copper Bear Party Predicting the price of Iron-Ore is difficult, but it may still halve to be only up 250% in 11 years- hardly...

Nicholas Forsyth

Market Matters

Oil joins the Iron-Ore & Copper Bear Party Predicting the price of Iron-Ore is difficult, but it may still halve to be only up 250% in 11 years- hardly bearish. Let's consider BHP's breakdown of earnings estimated for 2015 in order of importance: 1-Iron-Ore (36%) - Hard to predict, but I can easily see further downward pressure as the Chinese economy slows to normal levels. 2-Crude Oil (36%) - Crude has fallen 14% this month and further downside pressure would not surprise. 3-Copper (21%) - I remain bearish, with a long term target 50% below current levels. BHP was recently stated to be Australia's most inherited asset and I think it's a BIG SELL. My target for BHP is clearer in $US terms, where it is basically over 50% below the current price. Looking at the matrix of future exchange rates, this equates to the below: •At 60c -$25,at 70c - $21.40, at 80c - $18.75 and at 90c $16.67 - a bleak outlook. BHP is unchanged over the last 7 years, while CBA is +50%, so all I am saying is the trend will continue. (VIEW LINK) nKd58D


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