hand brake, page-8

Mrs Peel,

Many thanks for following that up. It will be interesting to see what he says. It does seem the Chinese alter these rates frequently, so I could still be completely wrong.

All,


Chinese import tariffs on DAP remain unchanged in 2010. Source: http://www.sourcejuice.com/1286427/2009/12/16/Next-year-China-adjust-overall-level-import-export-tariff/

Chinese import tariff on rock phosphate is to be reduced in 2010. (Same source as above link).

Export tariffs on rock phosphate are a seasonal thing (the Chinese like to impose them to hold down the domestic fertiliser prices, and to prevent local shortages developing at specific seasonal times, I wonder?

Export quotas on rock phosphate remain in place (to stop the export of fertiliser manufacturing jobs?).

The supply of phosphates in the world market seems ample (going by the headlines below from June 2009). See below.



Most posters on MAK (bulls and bears) probably agree that MAK offers mega leverage to the phosphate price. If the phosphate price is to rise, maybe it is the demand side that needs to increase massively. I am not sure I accept Mr Drummonds explanation that DAP price rises generally lead to rock phosphate price increases: stating this has been the case in the past does not deal with the issue of whether the two price rises were a coincidence or whether there was a genuine cause and effect link. Yes, I heard his point that the Indians agree long term rock phosphate prices based on the price of DAP, and I heard his subsequent cake explanation that if the cake sells at a higher price that people will pay more for the ingredients. However, his statement appears to imply all DAP producers are nice people falling over themselves to share their fatter margins with their impoverished rock phosphate suppliers? I cant see why that should be the case. Or is it the non-operation at full capacity of a particular DAP producer that leads it to try to increase output of DAP to spread its fixed costs more thinly per tonne produced that causes it to bid up rock phosphate prices? Is that the mechanism by which the two prices are linked?

Most of my phosphate exposure is via UCL (am hoping for a change of Govt. in Iran 2010)! If the phosphate price does move up, I half expect MAK to exploit its better leverage to make a scrip offer for UCL. The only things that can stop this perhaps are UCL spiking on an unexpected change of situation in Iran or MAKs share price remaining in the doldrums due to flat phosphate prices? MAK wouldnt use its precious cash pile to bid for UCL, would it?

Long MAK 11,111 due compulsory acquisition of my BON shares, and a minute paper profit on MAK due to the poor performance of the against the Aus$: nothing to do with the business acumen of the MAK BOD?