RE: 2014 EBITDA Heck even a pessimistic outlook of $800 DP spot price would still give Fortress an EBITDA of $218M
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and over 1/2 of the current global supply would shut down due to their higher cost structure.
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You see, even the Scotiabank analyst is having a problem understanding the strategy here. Oversupply, if there is any, is not a big concern for the lower cost producers. It may keep prices from rising, but the price will still stay close to the highest cost producers.
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Tell me that Fortress Paper's cost structure is going to shoot up in the near future and I will be glad to start worrying, but in the situation we are in currently, even without an increase in demand, Fortress Paper could bring on over 4 million new tonnes of DP and still be profitable, as long as they keep their costs in the current range. Why is this concept so difficult to understand?