Not a bad report overall highlighting the qualities of the various companies vying in this space, although the ranking systems still leaves some subjectivity. It is also good to get a concise snapshot on current and recent pricing trends in the sector too. As I pointed last time the there was discussion on pricing, the first leg down this year was forex but it appears weaker demand has also come through to compound. Interesting to see that the more valuable larger flakes have taken just as much of the brunt with pricing in the low USD1000s/t.
Based on the pricing table under this report, m0ngy, wherever you got your prices used in your post on the 25/07, they were very wrong thus everything you’ve said about VXL getting rubbish pricing and discounting on its latest deal is wrong (surprise?). According to this Large Flake CIF into Europe is around USD1100/t not the USD2500/t used in your “maths”, thus VXL’s basket price of over USD1335/t on its latest deal is looking fairly good based on this info (granted they remain light on specifics details and won’t say much more. I’ve asked and they won’t tell, gotta love the transparency of the graphite market). To date VXL has disclosed on a FOB pricing basis, which is important to point out given these pricing ‘benchmarks’ are on CIF, click HERE to know more on the difference. If VXL can deliver on its cost forecasts then this project will deliver attractive FCFs despite more depressed graphite market conditions and will be well positioned on the other side should the more positive forecasts of the graphite market eventuate in 2018 onwards.
In regards to this deal, you’ll probably go on about small and fine flakes but recall I explained to you that this will provide feedstock for advanced and HP lines which go on to fetch prices well ahead of these ‘benchmark’ prices so let’s not waste more time on that. It may not be getting sold in large or any quantity under this contract but VXL will likely find an appropriate avenue for it.
FND also got a good review however as I have pointed out before, the quality of the people you have selling your product is as important as what you have in the ground (to which this report shows that VXL has a top quartile resource) hence why FND packed up shop the other month.
VXL Price at posting:
25.5¢ Sentiment: Buy Disclosure: Held
