Tag Archive for Anti competitive behavior

Is price signaling subject to future anti-trust prosecution risk?

These news reports about iron ore present an open economic question as some mining companies use the news media to signal “Market Supply” changes to their competitors.

Might come back to haunt them later in when attorney generals in the EU, the US, or China consider the tangled web of supply and demand.

The Future accusation could be that they are signaling their competitors as to supply based pricing shifts. Eventually may result in a massive due diligence regulatory hunt for irregularities.

The claim will be that suppliers used the new releases to signal a collusion to economically try and drive prices up by collectively reducing supplies.

Here is a current “supply change” news report as an example circulating this week.

As for rail companies, the signaled message continues to project much lower resources traffic like iron ore and met coal than is probably in your current strategic rail traffic plans.

See: http://m.miningweekly.com/article/metals-investors-look-for-miners-to-cut-supplies-to-lift-prices-2015-07-03

A few points reported include these commodity alerts.

On April 30, Brazil’s Vale, the world’s top iron-ore producer, said it was considering reducing forecast iron-ore production by up to 30 million tonnes over the next two years. Rio Tinto is the second-biggest producer of the raw material for making steel.

Among base metals, the main focus will be on aluminium and zinc, analysts said. “Aluminium tops the list in terms of potential and much needed production cuts in the Western world”

“Top producer Rusal of Russia said in April it might idle 200 000 tonnes of capacity.”

“US group Alcoa said the month before it was reviewing 500 000 tonnes of smelting capacity.” “On Tuesday, Alcoa said it would permanently close its Pocos de Caldas smelter in Brazil, which has capacity of just below 100 000 tonnes per year.”