whooshka ... a new global epoch ..., page-54

Champ

I have never understood the premise that because a supplier can't make money below a certain price then that price will hold.

Firstly, producers will sell below the cost of production for a time because:-

1. They have hedged.

2. They believe the terms are short term and wish to maintain their client base.

3. They hope to eliminate weaker competition.

4. They can shut down their less economical output in the short term.

To suggest that breakeven is some sort of base price may make sense on a long term basis but not over a one or two year time frame I suspect.