If it asks if the global market for kaolin is declining, or expected to decline, the answer is no. The paper market is shrinking in relative size to other kaolin markets, and perhaps shrinking in absolute terms. I think the paper market may be steady globally, but not in all countries. Tthe ceramics and fibreglass markets are growing globally, and more so in WAK's target geography, East Asia.
If you are asking is investor sentiment for kaolin stocks waning in Australia, then I would think it is, and for good reason. The main problem relates to what I call story stocks - all rah-rah-rah and no substance. The track record of the kaolin hopefuls is dismal. Ignoring SUVO for now, the only new venture that I know that got started was at Skardon River in Queensland, but it died soon after birth. I have forgotten the story, but I recall that a hostile trade union may have had a hand in that premature death. The original project was taken over by Minerals Corporation Limited, which was placed into voluntary administration in June 2010, and kaolin mining ceased.
Suvo is a business that had been around for decades, so it falls beyond the pale of the rah-rah-rah brigade. Imerys, the largest global firm in the kaolin business, owned it, but they sold it for a peppercorn price, but retained the marketing agency. I have never taken much interest in SUV, so I have little to say about it. I think it has disappointed shareholders.
WAK too falls beyond the rah-rah-rah compass in my view, because it did not tout the ultra-pure-alumna subset of the battery-materials story - its focus was on mundane markets of old, with more emphasis on the fibreglass subsector than is typical. This was simply because in many respects its ore suits that sector, being of astoundingly high purity, and generally its particle size suffices. Unfortunately, the specifications for the continuous-filament fibreglass subsector has shifted to the point where WAK's <1% >45 microns "test residue" must be reduced, or a case must be made that the <1% residue contains insufficient nasties like carbon (C) iron (Fe) and anatase (a group of mineral with crystals that include Fe as a significant contaminant). After a string of delays that required capital raises for WAK to keep afloat, the market has not been able to digest this <1%-residue problem, which triggered yet another share raising (hence value dilution).
My average buy price is about 13c, and the SP is now below 4.5c - not a good story.
WAK Price at posting:
4.3¢ Sentiment: Hold Disclosure: Held
