Vales decision to shut down its' nickel operation for two months is actually a good one. They are also shutting down Voisey's Bay. All producing companies have cyclical shutdowns or slowdowns where production is reduced. It all is a function of supply and demand. I live in a paper town where Abitibi just permanently closed the mill. Now they are in Chapter 11 and all the employees severance pay which amounts to $75,000 per person is probably lost. The paper demand has been in steep decline for years but unlike metals it just does not recover. This results in towns like ours losing a major industry out in the boondocks, out of sight and out of mind with very little help. Quite a contrast from the automotive industry that exists in cities. I worked at an iron ore producer and we went from maximizing all the ore we could produce one year to cutting production in half two years later to shutting down from 5 to 13 weeks two years after that . It boils down to if your customers don't need your product, you can't afford to produce it. The other situation is if you are stockpiling and selling to the open market, you can't allow stockpiles to get too large because it will most certainly depress the price. If the supplies are saturated globally and companies continue to produce, we may be in recovery for a long time before commodity prices get to a level where companies are profitable. I don't mean break even, I mean making tons of money so that their shares have stellar gains and they are in growth mode and need to develope properties like NOT. The only way this can happen is if they control the supply to meet the demand. When the demand increases, and we have minimized stockpiles, commodities will increase in value. The only way to do this is to stop producing. Vale is doing the right thing. South Africa is doing the right thing with ferrochrome. Supply and demand, how much more elementary can it get.

Mike