Some more information
Iron ore prices touched peak in April 2010. Since then price has been falling. Prices have been coming down for last four months on the back of declining demand from China and migh stabilize at current level of 140.
Iron ore price at the beginning of 2007 were close to 80 USD per ton. After that there was a steep rise and by the end of October 2007 prices touched a peak of 180. Price remained nearabout 180 till middle of 2008. During second half of 2008 prices started declining sharplyand came down to 60. Tilllate 2009 prices remained below 100. From November 2009 onwards prices started increasing again and touched a peak of 180 in April 2010. Since then there has been a sharp correction and it has come to 140.
As you already know iron ore price has been highly volatile.
If we model the Raw Material as % of sales quarterly basis we will find that it is flucuating from as high as 69% to 59 %. Last Q it was approx 61 %. Assuming that iron ore inventory is bought three month in advance, Q2 iron ore prices should be higher than Q1 (unless they bought a lot of iron ore when it crashed last year).
(I dont even know whether they buy iron ore or have some mines). If they buy it there might be long term contracts (like 6 months - 9 months). But they are small company, so cant say for sure.
So before you buy this stock be aware of the fact the iron ore and coal prices can fluctuate wildly.
By the way chinese demand came down last year because they bought a lot of iron ore last year and are consuming the inventory. In addtion they are also focusing on domestic production. Chinese demand alone can change the price dynamic for iron ore across the world significantly.
At the moment spot prices are trading at discount to contract prices.
2-3 days back some Indian minister also commented on ban of iron ore export from India. So sentiment is for price coming down. But Q2 iron ore buying must have been already done before start of Q2. May be at peak Q1 prices or may be at low 2009 year prices. Most of the iron ore which is exported from India goes to China.
Also with recent changes in iron ore industry like BHP and Rio tinto thing, the iron ore production is a lot cocentrated than 5- 6 years back. Top 5-6 players control more than 50 % of the iron ore production. So dont expectprices to fall like they did during2009.Supply demand scenario is always touch and go and hence there is high volatility.
And that could be one reason why stock is trading at low PE 
And so i think Sales growth is very important as then even with high raw material prices company will be able to deliver EPS numnber.
Not too sure about coke and other ferrous alloys which are other important raw materials. But i think just like iron ore, they are also influenced by steel production in China.
Iron ore must be 20-30 % of total RM, same with coke. Ferrous alloyw would be some 15 -20 %.
Some of the above facts should be cross checked by one of you as i ve collected them from news sources 
Regards