Seems to have bounced
after testing the weekly 200 EMA, which is comforting, especially with the current price weakness on the LME .
What we need to now keep close eye on is the actual tin price itself , just in case it breaches the $20000/T threshold and with enough bad news, heads south towards the mid teens.
We are fortunate in that the AUD weakness insulates us somewhat in the costs base, however profitability may suffer quite substantially over the next half year, unless the macro economic fundamentals change rapidly overnight at some point.
I admit I have been one of the main protagonists for b!tching about management over the recent trading period, so I must say that having this large buffer of CAB at present might be quite useful should profitability suffer considerably, for the foreseeable future.
Perhaps the purchase of a distressed tin play some where, or even picking up a lease close by on the mainland, should it be available.
One positive with such a low tin price, is that supply will be held from the market until it becomes profitable to sell on the spot market again.
What I would like to know, is what ratios, if any, does MLX sell at spot, or with future supply contract? I do hope that we don't get caught in a spiral where we supply at a miniscule tonnage rate, while the spot market is rising rapidly, as stock dwindles.
I wouldn't be surprised if there is a large 'short' going on at present in order to secure tonnage at a low price now, BEFORE the tin price spins back on it's axis again, once economies start to hammer their ESG and renewables with fervour.
You would like to think that with the management's activities in the ASIA Pacific, they probably have a far more intimate knowledge of what is in play, than us mere plebs.
Interesting times indeed...
(20min delay)