Hi KOH It's good to hear there are mechanisms but would it...

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Tradergimp

2,421 Posts.

01/05/16

10:07

Post #: 17644202
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Originally posted by kingofhell ↑

Refer to the EGM summary notes from Pappilons and Trommel, 17430387.

The below is a part of the notes. Franks stated that there are mechanisms to scale down Chinese offtakes to accomodate big names from North America, Germany, Korea and Japan. I heard that there are big demands for our Jumbo and Super Jumbo from the west as well. Our products are superior to synthetic. They will replace synthetic, setting a benchmark for the industry.

Thanks Pappilons and Trommel for your excellent efforts.

SQ: Re: additional remaining 60,000 tons available, if western users want more, will we be reducing the Chinese offtakes to accomodate?

In essence, yes. Both Franks noted that the general approach is to reduce Chinese off-takes if/as needed, should western users seek greater engagement. There are mechanisms for doing this. FP: 'We want to be in a growth market ' [ie not an old, declining commodity one]. 'We want to make more money'. They said the original off-takes with Sinoma and Sinosteel signed a while ago where back when Magnis was following the path that the other graphite companies were in that they were planning to sell a 95% concentrate. As mentioned above they are targeting a growth market and now plan to sell a very high purity product 99% instead.

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Hi KOH

It's good to hear there are mechanisms but would it simple be the mechanism of price? All these contracts are not to supply graphite at a fixed price but a market price? All mns would have to do is raise their price to what the market is willing to pay for it.

Chinese won't pay 99% price for 95% product?? If mns state that's the market price then I'm sure the Chinese will reduce their quota and mns will happily oblige. If the Chinese demand to get the tonnage they asked for they will simply have to pay mns' price, so no problem?

Is it as simple as that? I would assume so?

MNS Price at posting: 57.5¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

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