Sell Fortescue Metals Group (FSUMF.PK)
As I wrote in my 11:45 post today, I think the short-term commodities cycle has turned. China’s buying spree, which fueled a furious commodity rally in the last six months, is, if not over, slowing. China’s buying in the second half of the year is likely to be much slower than in the first six months of 2009.
Which leads to my decision to take some money off the table in the most volatile commodity stocks. Fortescue Metals Group (FSUMF.PK) certainly fits that description. Although the stock is down 32% from my purchase date on December 19, 2007, it’s up 129% from the March 9, 2009 market bottom. Read more
Trading halted in Fortescue Metals: more cash from China on the way?
Trading in Australian iron ore miner (and Jubak’s Pick) Fortescue Metal (FSUMF.PK) has been halted in anticipation of the release of news on Monday that the company has completed a ”commercial negotiation”.
Speculation in Australia is that the news will be that China’s sovereign wealth fund, China Investment Corp. (CIC), has decided to invest $1 billion into Fortescue. CIC, rumors go, will get convertible bonds in exchange for its cash.
The new money would go a long way toward funding Fortescue’s goal of expanding producton to an annual 95 million metric tons by sometime in 2012. Production is now running at a rate of about 35 million tons a year. Read more
