I just can't wrap my head around this one.
I believe
@kaiseriqbal did a great analysis of the potential cost of the DSO phase based on several verifiable numbers and some reasonable assumptions based on comparison to similar operations. He came to a cost of $73USD CFR China. Could he be off 10 or 20%? Sure! But I would think the cost should stay under $100USD easily.
So why the cancelation?
Honestly there is a lot of chatter about how China is tanking the IO price, but really its not China! Its Covid with several parts of china and several large economies in Asia (Vietnam, Indonesia, India) either fully or partly in lockdown (not to mention most of Australia and also now New Zealand). On top of that we have many supply line issues with as an example Toyota slashing production by 40%!
Obviously this has a huge, but very much temporary, impact on steel/IO demand. This demand should pick back up once these lockdowns end and there may be a waiting list for Toyota's!
Honestly I can't see them not being able to profitably produce and ship the DSO at current prices. I also would think they are very much jumping the gun if they assume IO prices will continue to fall and not bounce back before December. I don't believe they can predict this accurately and they shouldn't make a decision purely based on current negative sentiment.
This is just all very strange. Something doesn't seem to add up.
