Rock Phosphate comes in different grades and different pricings....

Rock Phosphate comes in different grades and different pricings. The commonly stated prices of Moroccan Rock Phosphate tend to be for the 66-68 BPL. If you read from the publicly available papers on fmb group for phosphate from Mar 2009, the pricing for 66-68 BPL RP was $150 from Morocco and asking $200 for 72-73BPL. (All prices FOB).

Now if you consider that the material MAK is shipping is being quoted at 79BPL as of the December Quarterly report, you can see the quality is higher than the material shipped from Morocco. If the prices of RP reach $150 as expected with the DAP prices hovering around the $500 mark (technically at that price you would expect $170-180) then you could expect MAK's DAP of high quality DAP to be asking $50 more per tonne. At $200 per tonne plus a $30 freight premium you could see MAK's profit per tonne FOB darwin reaching $100 per tonne on these historical figures.

Key points. MAKs RP is of high grade and worth more per tonne (perhaps the $50 or more asked by Morocco), MAK has a $30 per tonne freight advantage from Darwin to India (more to NZ) and the DAP price is sufficient to be asking more that $150 per tonne FOB Morocco for RP at the moment.

If MAK manages to seal a 500k tonne contract with either NZ or India in the next 2 months, look out for the SP.