Gentlemen, I worry for your sanity! VAT and export taxes have nothing to do with CoP.
Jason, I'm not sure of the point of your calculation, except to prove my point that Chinese CoP can't have gone up six times. If they were profitable at $5 in 2006, and at $4 in 2005, your calculation now puts the Chinese CoP at a maximum of $14, based on the assumption that the miners' wage increases are representative of the average wage increase, which is unlikely. The 200m middle classes didn't get where they are without taking much more than their fair share.
So the Chinese can probably take a 55% fall in the basket price and still be profitable. Especially if they really are rationalising their production.
LYC Price at posting:
52.5¢ Sentiment: None Disclosure: Not Held
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