Channel Break Smammel Break.
Man, there is a train wreck going on over here. Spot down to $18.75!
Heavy. Serious capitulation now folks. Where is this going to now. This has to find a bottom soon but this is getting ridiculous. Keep in mind UPC is out there now with $20m looking for product soon, but if I was them I'd be wanting it to find a bottom...wouldn't you?
Makes me think of this moment.
Today's a big day for the punters, if you haven't had enough already. Read the report though. My interpretation before this was that they'd only produce enough to meet contracts. Makes sense right??? Now it's confirmed.
It's all about the U price now. Nothing else matters.
PDN is a very interesting story at the moment as this is the qtr that they 'say' they are filling contracts, but the last one showed them totally exposed to spot ($25 for qtr). So this will be interesting to see how they come out of this and in what shape/form after their supposed CNNC payment gets made. Given they have to give (currently) 25% of their U away for spot price to CNNC makes me think there isn't a lot in it now in upside as it used to be.
Sorry for digressing here, I'm interested specifically as I feel that there 'could' be a catalyst in PDN's destiny tied to the U price. Might be nothing major but at the least will see some more product taken from the open market and sent to the opaque Chinese fleet market. Might be another 1.5m lbs and in itself a 'catalyst'. But all that said, PDN is cheap enough now for a party to make an all out tilt on the Co. That also, would be another catalyst, especially if it gets bought from Chinese interests, as PDN has been a huge source of spot supply over last few years.
Anyway...wow. $18.75. This is huge capitulation. Huge. Just huge. It's only the best and highest grade Khasack mines now that would be making money...and it wouldn't be much. And most commentary is that their mines have picked most of the lowest hanging fruit (high grade) stuff in the past decade.
Will be interesting to see if it affect long term pricing though, as nobody is going to contract at $30 long term prices in my opinion.
All about U. I see a bottom soon. But it could be a lot lower for a small period of time.
Clench cheeks and know that it will all be over soon when Bubba has had his way.
Cheers
Gav
