The Trustees believe that the production curtailment at Northshore and the lay-off of 125 employees will have a negative impact on production attributable to Mesabi Trust in 2013. If the production curtailment continues for a substantial portion of calendar year 2013, the Trustees believe that the total shipments from Northshore, and the resulting royalties payable to the Trust, could be lower than calendar year 2012.
Yes, but very vague statement so that adds to market uncertainty.
For example, even if production if curtailed, will shipments necessarily be reduced (how much) assuming they have stockpiles? If the curtailment was just to reduce stockpiles then it needn't necessarily impact shipments.
What is the extent of the production curtailment? They mentioned 2 out of 4 lines being closed, but people on this board suggested they may be the much smaller lines and so the percentage reduction in production is much less than 2 out of 4 implies.
As we saw with VOC, anytime there is a negative statement without quantification, the market likes to assume the worst case scenario. Having said that though, the statement in the distribution announcement is clearly implying that 2013 distributions are likely to be lower than 2012.