Viewpoint > Humphreys

The virtues of recession

The market rally in the first half of this year has come as a relief to embattled miners and prompted speculation that the worst is now behind us.

Viewpoint > Humphreys

The virtues of recession

The market rally in the first half of this year has come as a relief to embattled miners and prompted speculation that the worst is now behind us.

The virtues of recession

Mining operations are yet to make the cuts necessary to simulate a sustained price recovery (image: BHP Billiton)

While it is entirely possible that prices have passed their low point, it does not follow from this that a sustainable recovery is imminent or that the supply side adjustment is complete. More likely, prices are in for a spell of bumping along the bottom and further supply adjustments will be required.