Just curious.. Why do these miners allow the consumers to decide the commodity prices.. Why cant they say it costs us 50 DOLLARS to manufacture a ton of Iron ore.. We want a 20% margin.. Take it or leave it.. That would be simple business.. Atm the companies are at the mercy of the consumers(US and Asian buyers)
because somebody under cuts you and in this space the buyer has all the power. OPEC sorta did it with oil for a while, trick was they controlled some 70% of global supply and manage process by producing accordingly. Plat guys have also spoken of trying this, nothing as yet
There is no other way.. Platinum is in the 800 dollars, most of the producers at this level are producing and selling at a loss.. Now sound business practice is that is not sustainable.. They have use ordinary old business philosophy of cost plus a markup way of doing business..
but they need everybody on board coz if say IMP sells at cost plus they selling at say $1750, why buy from them when open market is $800 .. of course IMP have effectively then removed their supply and this would help prices higher, but to $1750 higher and if they hot that then IMP supply hits market and price collapses .. if supply / demand all they can do is manage supply
If I was the mining minister I would call IMP , AMS and Lon in a room.. Say you guys control the majority of platinum production in the world.. We don't sell a dollar under 1250.. That's it.. The market cant just stop using platinum.. It will force the consumers to pay..The miners will be profitable and it will be good for the company/employees..everyone.. Only winners are the consumers currently
In that case the only variable will be cost of production.. In determining the profitability of the miners. This should be gazetted.. Or we will have another ACL.. As a country this is a major risk..causes unemployment/reduced tax collection and eventually will lead to political instability..