AI
Tuesday, October 20, 2009 10:59:18 PM
Quit doing simple math there sir... You ar emaking me feel like I missed something in kindergarten whne not paying attention 
Actually, I doubt it is real clear what demand would be for the company as I would venture many companies would hold off on showing how much they want until capacity is built. Otherwise, the customer loses a bit of leverage in price.
If I'm a supplier and can't keep what I make in stock, I am going to want to ask for higher prices. And if I have lots of potential customers wanting it, I am going to lokk to expand as quickly as is economically sensible/feasible.
Conversely if I am the customer and know the supplier has limited capacity and supply, it is not a good thing IMO to say 'give me a bunch of this soon'. You lose leverage as a buyer/customer at least to some extent.
So just speculating but my guess is the announce by BHP to sign a 5 year deal is going to put a bit of pressure for someone like Rio Tinto to try and get onboard with some kind of agreement if the company gets more capacity. We'll have t osee and it is just 'wear plate' but hey, it is the best alloy overlay plate available IMO.
And downtime from wear-related problems costs many many many billions of dollars annually.
Actually, I doubt it is real clear what demand would be for the company as I would venture many companies would hold off on showing how much they want until capacity is built. Otherwise, the customer loses a bit of leverage in price.
If I'm a supplier and can't keep what I make in stock, I am going to want to ask for higher prices. And if I have lots of potential customers wanting it, I am going to lokk to expand as quickly as is economically sensible/feasible.
Conversely if I am the customer and know the supplier has limited capacity and supply, it is not a good thing IMO to say 'give me a bunch of this soon'. You lose leverage as a buyer/customer at least to some extent.
So just speculating but my guess is the announce by BHP to sign a 5 year deal is going to put a bit of pressure for someone like Rio Tinto to try and get onboard with some kind of agreement if the company gets more capacity. We'll have t osee and it is just 'wear plate' but hey, it is the best alloy overlay plate available IMO.
And downtime from wear-related problems costs many many many billions of dollars annually.
I don't mind stealing bread from the mouths of decadence... But I can't feed on the powerless when my cup's already overfilled.
-Temple of the Dog
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