Planned over-production has been a norm for the IO industry since the early 60s, only then it was Japan that encouraged it and nobody cared as there weren't any juniors trying to get into the market.
The steel making industry REQUIRES over-supply. It costs millions to turn off a blast furnace and then restart it. The industry actually needs to know that there is over-supply to have some comfort in expanding. It also needs HOMEGENEITY of supply, so encourages the big producers to ensure that over-supply.
The only difference is that now investors care because they have invested in high risk, high cost, low product quality producing companies. Sorry, but the only ones who have been sucked in are the investors that believed those companies were worth investing in. The big boys (+/- FMG) will happily go on doing what they have been doing since the 1960s with scant though for some piddling little iron producer's future. And why should they? They have played the game for over 50 years very very successfully. No back fires, no misreading, just a whole new bunch of naïve investors who thought they knew the market and have been caught out.
