Perhaps a correlation? Attachment 6623
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Perhaps a correlation? Attachment 6623
I wont be surprised if Japan becomes part of the BRL story. Coking coal is not just about China and India.
Coking coal price has slipped again last few weeks according to the link: http://www.sunsirs.com/uk/prodetail-417.html
We should see a quarterly report in the next few days which according to latest advice should show a cashflow positive scenario? Anyone want to comment on the chances of cashflow actually being positive, and if so the effect on shareprice?
Well, firstly - while it is true that the coking coal price did slightly drop (roughly half a percent) over the last couple of weeks, it still is in an uptrend (e.g. still higher than it used to be 3 months ago). You might have noticed as well, that both the Chinese Yuan (or RMB) as well as the US dollar gained during the last month on strength compared to the Kiwi Dollar (the Yuan roughly by 4%). Given that BRL would be paid in Kiwi dollar, they still would get now more for their coking coal than they would have got a month ago, if they would have exported (what they didn't).
Not sure however whether I expect anyway a connection between the coking coal price and BRL being cash flow positive for this quarter. They don't export currently (but samples), and the inland price they get is (at least in the near term) contractually fixed.
The company said that they will be cash flow positive for the rest of this financial year, and given that the lower oil price must have given them an additional push, I would say that anything else (than being cashflow positive) probably would be devastating for their share price - and as well a breach of reporting requirements.
If they however deliver (what I think, they do), than it might give the SP a light tick upwards (just increased confidence). Don't expect however big jumps, unless they announce as well that they are going to start Escarpment. Not sure however, whether I think they will do this now - in my view the time is with them (resources like steel and coking coal IMHO likely to rise over time as long as the oil price stays down)
Discl: hold - and as always, DYOR.
Company update Sept 2014,page 10, stated that domestic supply contracts are not affected by global pricings. Time will tell.
here we go: https://www.nzx.com/files/attachments/207281.pdf
Cash positive quarter
Production up 71% on the previous year
So I guess - so far, so good. Nothing spectacular, but they did what they said they do ... and seem to be even able to weather smaller storms (major issue at one of their customers plants reduced their coal demand for some months).
Unlikely that they can operate in this mode for many years (remember - Westport cement closing down in 2016), but until than we hope for the export coking coal price to recover ...
Holcim had a plant defect now expected to be back in full production. With our dollar going south I wonder if they will review their decision to shut down. Our dollar is down 10% from when they released the decision to close.
Some optimistic reading.
http://www.kitco.com/news/2015-01-28...5-in-2015.html