Iron Ore

It's amazing to see the movement of Iron Ore stocks on Friday.

I own two iron ore stocks in my portfolio (MGX and SDL) and have been watching some more of them. My plan was to buy more when things are settled. It seems that I just missed a run.

The shares of the 'junior' iron ore mining and exploration stocks went running last week after the Sinosteel move on Midwest Corp succeeded and talk re-emerged of claims of rising Chinese interest in the sector and especially Fortescue Metals Group. Hopes of a final settlement between Rio and BHP and Asian steel mills with big price increases of 65% or more, is also helping improve sentiment.

Friday saw some big upward moves:

• Aurox Resources up 24.3% to 94.5c,
• Gindalbie Metals up 20% to $1.10,
• BC Iron Ltd up 17.9% to $1.45,
• Brockman Resources up 12.8% to $2.64,
• Shaw River Resources up 9% to 10.5c,
• Territory Resources up 7% to 91c,
• Atlas Iron up 6.6% to $3.37,
• Fortescue Metals up 5.4% to $8.21 and
• Mount Gibson Iron (MGX) up 5.1% to $3.07.

See, China has been busy. It succeeded to acquire Midwest, and took stakes in some of others. It looks like Chinese steel mills are focusing on the leaders in the second tier of iron companies. By that, we mean the companies outside of BHP, Rio Tinto and Fortescue who have the best-developed assets.

On the list:

• Sinosteel also took 2.4% of Murchison Metals' (MMX) shares. Murchison controls 153 million tonnes of iron at Jack Hills in WA as of today. But it wants to increase that to 375 million tonnes in the next few years
• Apollo Minerals told the market the Chinese Iron and Steel Group would increase its stake in Apollo by 19.9%. In Australia, this is the maximum stake allowed before the owner must make an official takeover bid. Apollo Minerals already had the beginnings of an off-take agreement in place with Chinese Iron and Steel Group before it took the new stake.
• Don't forget about Mount Gibson Iron saga. The Chinese tried to get 40% of them without launching a formal takeover bid.

The question is: Which one's next?

The safest asumption is, if you do not know which one, spread your buy to the lot of them.

And if I did that just a couple weeks ago, I would have made a serious money.

I did not!! The current trouble in the share market chickened me out.