U.S.Steel's Minntac mine was announced to be temporarily shut down. Cliffs operates the Northshore mine where MSB's interests are located and shipments I believe are going to Arcelor Mittal. The reason for Minntac shutdown was from decreased U.S. Steel's demand. There was no similar announcement for the MSB trust interests. Internationally, iron ore prices have declined. I believe MSB's ore interests are all domestic. I expect royalty payments could decline from recent levels but not completely end. Recent distributions have been higher than my expectations. With interest rates so low and now with an unfound fear of a similar shutdown for Cliff's MSB production at the Northshore mine - as soon as this panic selling subsides, it would be a compelling opportunity to add to positions. Right now seems to be a falling knife situation - highly speculative. Sometimes with investing, taking the greatest risks returns the greatest rewards. I do not offer personal advice to buy. Right now my only position in MSB is in a traditional IRA where distributions are heavily taxed and I feel that any loss is shared by my partner - the U.S. Government.
Which contracts? Month/strike ???? Just curious….
I hold 15% cash and sell puts against quality stocks I already hold (not MSB) and would buy more of at a price 15% below the current price, and I try to sell the puts just after a down correction. I've only been burned a few times.
PS I should add that Minntac is an ore operation run by US Steel, and US Steel has already idled some of its steel production, so not sure how direct the read through is to MSB. Clearly some big holders think its direct. Maybe they're right - feel like there's a bit of info vacuum right now - until CLF and MT report won't really know what the outlook for US production is.
Selling the stock down to this level on what presumably are temporary steel shutdowns seems to me to be short sited, but what do I know? Obviously the worry here would be that MT, where MSB ore goes, also shuts in capacity.
U.S. Steel (X) Stock Down Today on Plan to Idle Minnesota Plant
ByShawn IngramFollow | 03/31/15 - 03:33 PM EDT
NEW YORK (TheStreet) -- Shares of U.S. Steel (X - Get Report) were falling 4.3% to $24.35 Tuesday after the steel producer announced it will idle its Minntac plant in Mt. Iron, MN.
U.S. Steel said it will idle the plant on June 1 due to the company's current inventory levels, and the ongoing adjustment of its steelmaking operations in North America. The company said it will continue operating Minntac in a reduced capacity in order to meet customer demand.
The steelmaker did not say how many workers will be impacted by the idling, saying the number will be determined by operational and maintenance needs.
Earlier Tuesday JPMorgan Chase (JPM) issued a bearish note about metals and mining companies, including U.S. Steel. Analyst Michael Gambardella said the firm is "not looking for a material increase in steel prices, as we think imports will remain elevated and scrap prices depressed."
When the ships start moving it will give us a good Idea when to buy. Price per ton of taconite is going lower, but price per share will dictate the return on investment. Let the dust settle.
The issue isn't so much ore price, it's volume. Unless you think the US steel industry is going to close up shop and never re-open, this is probably a pretty good price. I'm mystified as to why someone would knock it down an additional 5% at the close.
Seeing heavy volume on the down side in large blocks. Now into 3rd day of this decline. Looks like a biggee is getting out. Steel industry/mining has been weak for awhile now. I would like to see a selling climax indication. It could be all that its going to go down but historically it has traded in the single digits. I have a full position and will double up if we do go below 10.
Right now I'm just watching it.
I owned this Trust 10 years ago. When I saw it at $16, I became intrigued: Generated a spreadsheet of all dividends going back 10 years. Did the same for iron ore prices. Tried to correlate those prices with the values placed on MSB over the same period. I came to the conclusion that MSB will have to trade down below $10 to re-establish equilibrium with the iron ore market. What I could not figure out was the prospective volume of ore, pellet and fines deliveries. There are prices paid and there are volumes to be purchased.
This trust has paid out quarterly distributions since about 1961. The question is if the payouts are sufficient insurance for a decline in the price. In other words, if you bag $2.00 in dividends over 12 month but suffer a paper loss on your investment of $4.00 during that time frame, does this investment make any sense.
The stock's trading volumes are increasing big time. I have no position in MSB. I thought about shorting the trust but did not do so. Most small investors here are conservative and chose this stock for steady income. I wish you all the best of luck
We wee hit with a masive short attack on Friday. Most of the loss was in the last half hour. Shorts accounted for 61% of the trading for the day. Most of the last 2 weeks was in the 10% to 30% range.
The White House has pushed for infrastructure spending, but Congress won't go there. Cliffs sells pellets using MSB iron to Mittal on the lakes. Mittal is barely running at 50% capacity, plus they built a substantial pellet inventory due to the previous year's winter freeze of the lakes. It will take Mittal's order book to get production back to full capacity before anything can happen. Iron ore pricing is in the tank due to over production. It is going to be a while for this to shake out.
It is not just MSB. Over the past year RIO and BHP have dropped as much or more than MSB.
And it is not just the past few days. The MSB price has been steadily dropping over the past year and is at a five year low (and, compared to RIO and BHP over the past five years, MSB price has dropped much more). In fact, MSB is back to prices of ten years ago. With the exception of a few brief price spikes to the high 20s (and even 30s and higher) in different years and, of course, the very low price below 10 reached during the 2008 economic melt down, MSB price "seemed" to stay or rebound to be above 20 until the past few months.
One explanation I read is that the strong dollar is screwing the prices of commodities.
I also think that our (U.S.) political leadership that has emphasized a war economy for most of the past twelve years as opposed to investing in infrastructure (a few trillion dollars invested right here in the good ole U.S.A. instead of out defending the petroleum empire might just do wonders for our internal economy).
The strong dollar and over supply coupled with seasonal decline in dividends. I expected it to hit $15, but not this quickly. Could be a great buying opportunity this June. Watch the production.