You are posting that CLF needs 170 per ton to break even. Three months ago you were posting a break even point as low as 125. Since Dec. CLF has slashed the dividend and has undertaking a major resrtructuring.It has issued new stock. In view of the above, why do you believe the break even price has gone up by as much as 45 dollars in the last three months? It seems to me that due to the above named factors, if anything, the break even price should have dropped.
first because I just saw it, I think I posted that the break-even in the past was averaging 125 to 140 to be more exact as the way I figure it varies with production quantities and those were the figures from six quarters of figuring, I had not done an analysis of the last two quarters until recently and the last quarter worked out to $168 which I rounded to say they wouldn't make a profit until 170. I have given how I figured this and you could have done the same but I do not mind doing it for you, one of my posts broke it out dollar and tonnage for the last quarter but a recap is they had a 1640 million dollar loss and 1050 was write down of good will leaving a 590M loss from all expenses in company, I added this to the revenue of IO (leaving out coal revenue) and divided by the tonnage they sold and came up with that number. The number is a floating number because you sell more in some quarters to spread all administration etc costs over. In another article it stated that the average price of IO was 150 and they received only 122 per ton from that amount. this is also given in the CC as guidance on revenue at different assumptions of IO price So IO has to go up a lot to make this profitable at these levels of production and costs of administration etc. If you have a question on any of this I will try to explain it further but look at the earnings report on 2/12/13 by CNW and the CC by seeking alpha for verification. I personally can not believe there are so many that do not delve into these reports and only read headlines with their hard earned money.