That is the problem, when the commodity price falls, it is not net margin that drives your operations but $$ profits. This process like all boom bust cycles has a death spiral for all profitable operations. They will consistently pump out more tonnage to make up for that "lost margin" because fix liabilities do not take any break.
If you now throw in the most important driver of price recovery, China, the problem seems to be only starting when they are having to spent a lot of financial resource propping up confidence. Remember, the authorities have tried to steer their reliance on exports with domestic consumption. Fortunately they still have many levers to pull along the way but I think they have realised that the shot gun approach in the past does not work efficiently akin to Rudd with the pink bats/school building approach. If you chuck money into the system and do not get a return ie Ghost cities, it will come back to bite as the beast require more stimulus each time, a bottomless pit!
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