Reality check, page-28

This is the sticky nature of the supply & demand curves for China based IO production atm. Would take a long time to eliminate the local China high cost based producers.

Chinese miners are killing Fortescue Metals
China's local iron ore miners, not BHP or Rio, are bleeding Fortescue

Fortescue might have expected that that BHP and Rio Tinto, the lowest cost producers in the world, would ramp up volume. Management at both companies have been telling everyone just that. BHP will raise output to 240m tonnes this year, up from 100m in 2005. Rio will produce about 300m tonnes.

They can afford to increase output because they boast low costs, less than $40 a tonne. Their actions have knocked about 120m tonnes of Chinese production out of the market. High cost imports from Iran, Malaysia and Indonesia have also disappeared but domestic Chinese miners still supply about 400m tonnes per annum to Chinese mills. This residual amount is proving hard to dislodge.

That’s because iron ore for Chinese miners isn’t just about economics; they must consider the social impact of closing miners and, because mines are often integrated with steel mills, the impact of production cuts on steel margins.

https://www.intelligentinvestor.com.au/chinese-miners-are-killing-fortescue-metals