The Rising Influence of Rising Affluence

[jbog]

It'll be interesting to see the IO market play out over the next few years. This year, even if demand is as robust as estimated (+8% vs +4.8% last year) supply will have caught up with demand (-4% currently) by the end of the year. Starting next year suppy will start to overtake demand and they'll be 20% excess supply compared to demand within 4 years.

That means the high cost producers will be selling at a loss. So much for the IO market.

This shouldn't be surprising because we've seen the same senerio many times before. Freeport-McMoRan, Potash and Enron come to mind.