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Increased production rates allow fix cost overheads to be spread...

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T1243

487 Posts.

28/11/14

15:41

Post #: 14373367
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Originally posted by peteai ↑

Barkston,

None of us can know their motivations but I've heard it reported they want to drive out their high priced competition even your "rather then let someone else eat their lunch" is pretty much the same thing

But as I wrote elsewhere - by ramping up production they are slashing their own profit margins a lot quicker that raising volume

and I can't see how that improves the overall returns for their shareholders ?
sure they can ignore the concerns WA govt, the Aust govt and Aust taxpayers but I can only see China as the big winner of this strategy

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Increased production rates allow fix cost overheads to be spread over more tonnes, effectively lowering overall cost per tonne.

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