Hi
@carelbiI can do more than that. Here is a chart illustrating what I suspected:
Teal line: as above, % of our revenue from China.
Orange line: weight of product going to China, illustrated as % where October was set arbitrary as 60% (to match revenue line).
- As clearly can be seen, both lines indicates we have been trending down with (SEG) sales to China since Oct last year. I'm pretty convinced we in June sold SEG stockpile (peak in graph) while likely still increasing our NdPr stockpile. This is significant: if we are sitting on $150-200m in inventories (stockpile), it's getting close to (worst case scenario) being able to stop C&L at LAMP for a whole quarter while tuning Kal & LAMP for the new carbonate feed, while still having significant cashflow.
- As for price, since a couple of years back we are mixing Duncan ore into our concentrate feed. As this results in SEG with 2-4x the heavy content, we get 'premium' price for it. While down from it's peak (~US$100), we are currently receiving around US$70 (AU$ 105/kg).
- SEG is significant, more so than many perhaps realise. With current weakness in NdPr (which will turn), we may actually get to a point where we get more for SEG per kg.. Of course, we are limited in SEG production, so it will always be a secondary revenue stream.
@ridingricho63 My pleasure. China has no intention to harm LYC, IMO. Quite the opposite, they are dependent on LYC and ROW mining. I've pointed to it before, without ROW, China's REE appetite would make the industry collapse.. They do not (!) have the resources domestically to match the appetite. IMO prices are largely dictated by illegal mining in China + ~30% scrap market that is used to play games with (call it shorting).
It's a complex market, but we are not entirely at the mercy of Chinese spot prices. We too can play the market, as I believe we just have with SEG/NdPr stockpiling. Tides will turn, I have little doubt of this.
On a last note, I'm not sure what we will see tomorrow. My numbers would indicate around $200m in revenue, which would exceed market expectations. If we in the Financial report (Aug) see an increase in inventories, I really believe this Q gives our bottom line in terms of revenue (what ever the number is).
DYOR
(apologies, was meant to be a short reply, but brain is revving after a 3w holiday)
(20min delay)