The Rising Influence of Rising Affluence

[dewophile]

Iron-ore mines in China have an especially high operating cost due to the low ore quality, and they generally shut down quickly during a period of price weakness (such as what occurred in 2009).

this is a key factor imo re the mid to long term supply implications. just to quantify this a bit i've read that cost per ton for most chinese producers is in the ballpark of 120-130 per ton for 62% equivalent, so in theory this should set a floor on prices. prices lower than that would remove about 400M ton equivalent of supply