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To: Joan Osland Graffius who wrote (52002)	8/30/2002 1:45:00 PM
From: reaper	Read Replies (2) \| Respond to of 209892

<<when we have economic down turns after long bear markets the production cut backs accelerate>> <<producers will keep the supply in check>> since most of the idle capacity is in areas (Europe, emerging Asia, Japan) where capacity never does seem to get taken off-line i won't hold my breath. remember, the CAPITAL is SUNK; its not part of the cost equation. so what matters is that they can get a price that is in excess of marginal cost, and the marginal cost is labor (low), inputs (low but possibly rising), and maintenance capex (low). and there is some capacity still being BUILT, in low-cost labor areas; in the aluminum market for example China this year is going to export about 250,000 tons after importing 120,000 tons last year. foreign steel producers have no intention of cutting back production, nor does Asia Pulp & Paper as near as i can tell. i personally think industrial commodities are still in long-term secular decline. food i really don't know and is largely dependent on weather. oil will be back to sub-$23 within 18 months, barring extended conflict w/ Iraq. Cheers