OMH 1.16% 43.5¢ om holdings limited

Hi King87, you can now understand why I didn't want to post the...

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    Hi King87, you can now understand why I didn't want to post the info on the OMH thread.
    Its impossible to convince others who don't want to hear, I note your posts on another thread. The importance of the cost of power will raise its ugly head soon enough. The cost of power is the single most important issue facing smelters, those with cheap power will survive and flourish, those with expensive power will wither and die. Its going to be a hard lesson for many.
    The old days won't return where every Tom, Dick and Harry can make a quick quid producing ferro/manganese alloys, its only the companies who have cheap power that will survive and profit.
    Those companies like BHP who took advantage of the cheap power in South Africa at the time built smelters. Those times have changed and BHP was then quick to divest those parts of the business into S32, knowing that the power situation was changing. The next S32 financial reports will show how bad the situation has become. Eskom, the electricity provider was in Court yesterday with Nersa claiming a further 16% increase in tariffs now and another 16% next year. S32 smelters won't survive.
    Its a lesson that many companies are learning, like Ferroglobe who are now struggling to survive.
    OMH management obviously realise the situation and have deliberately kept producing at full capacity, under cutting all their competition and now causing havoc in the industry. In my opinion its only ferro/manganese smelters that have hydro power or nuclear power that will survive in the future.
    Elkem has opened a new FeSi plant in Paraguay, its using cheap hydro power. Its not considered competition to OMH as its very small, just 11,000 tonnes pa, mostly for domestic use. Its unlikely to expand as the quantity of hydropower in Paraguay is limited and theres already disputes with their partner Brazil with the Itaipu dam.



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    0 Ferroglobe’s remaining European assets under stressby alanpatrickryan
    The Spanish government’s decision raise power prices have put Ferroglobe’s remaining ferroalloys there in jeopardy. The plants are already running at less than capacity and the company said they can’t compete anymore leading to speculation that there could be plant closures. The company’s French workers are also complaining about job security and reduced pay.
 
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