Ann: Pre-auction Sale, page-70

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teenar

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14/03/24

19:05

Post #: 72892584
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Originally posted by Acgm ↑

Seems to me you’re the only one in the room really questioning PLS management decisions. Best not to project your subjective position to a broader base.

Re the result here, early closure of auctions has been done before and produced successful longer term outcomes. Those outcomes may not be direct fiscal outcomes in terms of spod price but perhaps sends messages to others. For example, those shorting on basis of expected further spod price softening probably are sitting back now with a very transparent indicator that prices are not expected to go back any further across the breadth of 2024.

Now I’m sure someone (possibly you) will say it is but a small shipment … true … but do you recall what those small shipment sales caused to occur last time PLS ran some auctions?

A benefit of an auction is the deal is not subject to commercial in confidence terms about price publication which offtakes are subject too. Thus a producer can’t really publicise in advance the actual rate being got for contracted sales - but they can for these types of sales.

There’s also possibility of more sales by auction by way of closed or silent auctions for which we may or may not receive details of price.

My guess is the main purpose of this sale was to show to analysts that what they hear from price forecasters may not be the real picture but also gave an ability to say that all PLS product is basically accounted for. Now does that sound likely to be the situation if there is an oversupply/glut/insufficient demand? Or does this sale and announcing the result tell the broader market something possibly more important than the simple price in the sale?

In terms of only being 5,000T …. Someone might be able to remind me just how much someone like say CXO ships each quarter …

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Hi acgm.

A very subtle way of showing all and sundry that there is demand out their and if it was an oversupply then why would you go to an auction and pay more.
Anal…ysts are full of it.
Probably directed by the ccp with fat pay checks, imo.

T.

PLS Price at posting: $4.17 Sentiment: None Disclosure: Held
26 Upvote

1 Great analysis

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