of coz poaching speciliast from sakura or pertama ferroalloy would be the fastest way.
but i see no harm in "borrow" specialist from neighbor peers, through open communication and contract based manpower (and p n c term), just to kick start the idle furnaces.
1. Assumed Alloy Prices too conservative - UOBKH uses Ferroalloy prices US$2,000 (2021), US$1,900 (2022), US$1,700 and MnSi of US$1,500 (2021), US$1,400 (2022) and US$1,300 (2023) - FeSi prices is now above US$4,000 and MnSi is above US$2,500 - These prices are now being contracted for 1Q2022 is above US$4,000 - Prices are expected to stay firm or even higher in light of current global energy crunch and China control on pollution/climate target commitment.
- Market PE should be around 20-25x under current bull market for commodities/Industrial material sector - This is way below its peers like PMetal (PE 20-40x), Lynas (PE 40x), Ferroglobe (PE negative yet market cap US$1.5b)
The current pricing of ferrosilicon itself can carry this company forward... Also with the huge advantage compared to the other manufacturers with the hydroelectric power they are using...keeps cost down and margins high.
FeSi market outlook published by Fastmarket this week China • The ferro silicon price in China narrowed downward following a correction of a previous rally. But market sentiment remained quite positive since Qinghai issued an orderly electricity usage plan. This said that electricity usage can be divided into four levels, each corresponding to a different proportion of power cuts. The subsequent proportion of power supply will be adjusted in real time according to the power deficit at the time. • The price went downward to a rational level mainly because the previous panic in the market had cleared by the time Qinghai announced its power cuts plan. Electricity fees will be raised by 20-30% among ferro-alloys producers. • Considering the lessening of steel production cuts, along with the news that 50% of ferro-alloys producers were operating again in Fugu, in Shaanxi province, the industry was adopting a wait-and-see attitude. • Overall supply was still tight since many producers have full order books. Coupled with the recent bullish ferro-silicon futures market, this can support the high price.
Europe • European prices were steady in the week to October 15, consolidating a jump of almost 38% the week before, with deals reported within the current range. • The market was well supported in the near term and may push higher again, with domestic availability tight and replacement material hard and expensive to source. • There have been no signs of imports from traditional suppliers such as Brazil and Malaysia due to strong domestic and regional markets in the Americas and Asia. • Additionally, there was reduced production in Europe this year, and European steel production was running at close to capacity. • Acute shortages in container availability worldwide, bottlenecks at international ports, surging energy costs and record high freight rates were all seen as supporting bulk alloys prices in the near term.
United States • The US ferro-silicon market continued its precipitous rise this week, continuing to follow the global markets upward. • Available US stocks remained minimal, helping to drive pricing upward. • Production cutbacks and shipping difficulties have exacerbated the tight supply situation in the US. • Market participants thought that prices would continue to run upward in the near term given the current global market price levels and supply situation.
Current Ferroalloy prices translates to average GPM of US$1,700-1,800 /ton. OMH produces 380k ton currently at 75% capacity. It will produce 500k ton in 2022 when Malaysia opens its border in Dec 21.
One interesting point is that If they use current alloy prices of US$4,150/ton, the estimated EbItda is A$520m for FYE 2022 and A$840 post expansion. And the spot valuation is A$5.25 / share
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Posted by nagasaran93 > 2021-10-15 12:17 | Report Abuse
I just re-enter. =) let's huat chay!