Hi All, I am starting this thread to get opinions/ideas on how the evolving situation with the Omicron variant will influence E25's path forward. From where I stand I see a number of potential headwinds and tailwinds. The question is - will the net impact be in our sails or stall us further? Summary below:
Headwinds
- Potential for Baltic index to move upwards again from impacts to global shipping fleet requiring quarantines/increasing waits for berthing (as occurred last time).
- Delays to sourcing parts and labour for the repair of the plant as per the recent operational update.
- Overall sharemarket sentiment not being a market that is poised to receive good news (scoping study, nameplate announcements) and result in soft upticks instead of strong bullish moves.
Tailwinds- Reduction in oil price (12% reduction on the last day of trading) reducing costs for haulage to port.
- (more speculative, maybe an experienced person can substantiate/add) Manganese prices increase. My thought process here is that Africa is largely locked out due to being the main source of Omicron, shutting off Mang supply to China etc. It will also affect the ability of African operations to produce due to the need to reduce the spread. This will constrain the supply side and help float prices. (Another potential plus could be China seeing this as another threat to their stocks and go to top up and push the demand side favourably?)
- Operating in an Australian jurisdiction (particularly WA) should help shelter Butcherbird from Omicrons impacts to standard operation. I would also anticipate Australia having a faster recovery (or reduced impact) while Africa is not as well positioned to deal with the outbreak and is likely to have a longer lasting effect.
Hoping to have the above challenged and critiqued, and interested to see others thoughts. Either way the markets are going to be bloody tomorrow...
Thanks in advance to all for your insights.
(20min delay)