Andy, it is disappointing that the pricing mechanism doesn't allow for an immediate increase in contracted offtake pricing. We get that and most are aware that these offtake agreements were put in place at a time when the mine was in it's development infancy and like the financing arrangements, not ideal but required to progress the resource development.
Times have changed and lessons learned. PLS bent over backwards for the convertors when they delayed their expansion plans. If they now don't talk about the pricing disconnect and allow a more favorable pricing outcome for miners, I hazard a guess when offtake renewal time approaches, they will have to look for another raw material source. US and European convertors will be lining up for our product by then.
In the meantime we will more than likely honor our end of the deal, it's the Aussie way but we also have long memories. Large margins for the convertors during the tough times won't be forgotten. Spare capacity will now go to the BMX platform and attract premium prices. Existing customers won't get extra which I predict they will require. They will have to pay the > $1250 pt that the first auction achieved.
Product from Ngungaju will not go to offtakes. Contracted prices will slowly increase as the pricing mechanism catches up with Carb/Hydr prices. It's not far away. 3rd & 4th Quarters this year will be raining cash barring any unforeseen plant commissioning issues.
The future is bright and everyone knows it. Don't expect any substantial pullbacks with the caveat world markets. Cliched I know but markets are forward looking and they are now just starting to look. The days of having the predictable PLS smashdown are over IMO. The trend in place is a dangerous one to jump off.
I have been a shorter term trader in the past. The last really tradeable swing for myself was in January. The step pattern since then doesn't reveal immediately. Good luck to those that were able to pick a large % of those swings. It's not easy. We are now elevating out of the current uptrend channel into a new higher channel from what I see.
I need a substantial swing to make it worth while for tax reasons. The stress of getting off and not recommitting the same capital is too much. Riding the trend that almost has me at 7 figures profit is an enjoyable experience. I hazard a guess that if I had employed my previous strategies of trading on PLS, I would now be attempting to extricate a rather rough skinned pineapple from my delicate rear end.
Best of luck if you are talented enough to trade this. I gather you are out currently as your Position is not held. Beyond me and so is the stress.
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