hi cost producers gain more from increase pric, page-6

"The copper companies which will do best out of price increases will be the low cost producers."

While essentially your calculations are correct (albeit with your slightly fat Cu price ;-)) I still agree with the above statement.

While the % profit margin increases more for company X than Company Y company Y still maintains the higher margin. The factor of profit increase is far less dramatic when there is a small increase in Cu price. The profit decrease when there is a negative movement in Cu price is even more dramatic...

Say Cu heads to $2.50... (3-2.5)/3 = 16.7% decrease

X margin = 2.5-2 = $0.5
diff in old and new margin = (1-.5)/1 = 50% decrease

Y margin = 2.5-1 = $1.5
diff in old and new margin = (2.5-1)/2 = 25% decrease

So with just a 16.7% decrease in Cu leads to a significantly higher (50%!) decrease in profit. So company X's SP halves and company Y reduces 25%.