the thing with the manheim process is the biggest input costs are MOP and sulphuric acid. so a producer is at the mercy of those variable costs. HFR imply they have ideal conditions for manheim production for eg a local source of sulphuric acid so they will naturally be below the industry FOB average of circa US$500 -$550. their localised Spain based FOB cost of production though is unlikely to change the mop / sop industry dynamics and pricing. part of the problem of manheim production is the high cost of sulphuric acid and obtaining a steady supply. still i think it would be unwise of HFR to attribute 40% of their production to this process as the 2 biggest input costs are variable and can change quickly and no doubt are currently at record lows. it also suggests their MOP project is probably not that good either if they have to improve margins in other ways. in the end you can't beat solar brine extraction and RWD at FOB US$263 will be in the lower quartile of all sop producers in the world and the closest of all new producers to Asia (see presentations).
RWD Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
