bhp facing 920 mil 1st half loss on iron ore, page-10

interestingly BHP is sticking to it's guns on not cutting back production. The article suggests this may be just to keep the regulators in europe happy.

The contining of production at current levels, provides options to stockpile some of the iron ore, or sell it on the spot market.

I am not sure how long it takes to ramp up iron ore production for Vale and Rio (I guess 12 to 18 months) after month balling production. Any informed views on this.

The strategy should put BHP in a great position once commodity prices pick up, (less supply from high cost producers should lead to some stablising or lifting of the price) of course if it is a prolonged downturn then it may be a different story.

Another advantage of maintaining production levels is that BHP can sell more iron ore (albiet at a lower price) and therefore capture a larger slice of the market. Again positioning itself for a turn around.

Along the way BHP can make some more friends in china, by assisting to manage deliveries on a flexible time table. This will save a lot of "face" for some of the customers.

Yes barry load up the shorts so that we can buy for the long term.