Originally posted by jayszip:
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Eddie
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Hey, JZAs GZ said, interesting example but not a great analogy I'd respectfully submit.
1. LYC doesn't have any demand problem. They sell all their product and still make a good margin, even at current low prices.
2. Heard the expression "too busy fighting fires to buy a new fire engine?" Now is the best time to build out future capacity, when the opportunity cost of downtime is lower
3. Ramp up takes years, but prices can rebound in weeks. Waiting for prices to rebound (or for Lyc to start achieving ex-China premiums) , THEN resuming upgrades, risks missing the good times (as happened last time due to Malaysian politics).
4. We're here because the electrification of the world is happening (pace variable, but inevitable nonetheless). Ie. There's a long term structural driver of demand.
(20min delay)