I think it's pretty straightforward mate, the market is in oversupply. China's market manipulation, including prices and contracts, is a constant factor in their business practices and won't change anytime soon. This is similar to concerns about short sellers—they're always present, so there's no point in worrying about them. The same applies to Chinese manipulation.
The main issue here is that many are in denial about the current supply and demand situation. The reality is that the market is oversupplied now and is expected to remain so for a few years, with projections suggesting a return to deficit around 2028. This puts AGY in a difficult position, as an oversupplied market makes it very challenging to secure CAPEX funding.
IMO, a CAPEX funding deal is unlikely to be reached this year or next unless JZ is willing to yield in negotiations with a potential partner, resulting in an unfavourable deal for AGY/Puna. However, JZ may be too stubborn for that, and it would undermine his previous statements about "waiting for the best deal." Therefore, AGY needs to wait until market sentiment and prices improve, which could take a couple of years.
In the meantime, the focus should be on getting the 2 ktpa facility operational. It needs to produce at around 55-60% capacity just to break even, so that would be a good start. Additionally, securing an offtake agreement is crucial because production is pointless without buyers.
AGY Price at posting:
10.0¢ Sentiment: None Disclosure: Not Held
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