Brenid, Nice to converse with a thoughtful enthusiast.
1) I agree most of the contracts are probably 2-3 years with glass manufacturers and others. Big companies don't lock in commodity contracts long term. There will be a range but on average at any time these are half way through. Therefore PSH would have had the advantage of about a years average contract at the time it announced the closure. So that advantage is now about 6 months.
2) Agree that ANSAC is the price maker worldwide. Soda Ash is more expensive to produce in the Solvay process than naturally occurring Trona. But in the commodity market the price is that set by Trona. Hence the fall in profitability of Solvay plants. In the end the Solvay plants like PSH couldn't break even at the Trona price. (Particularly with their high energy costs). That's history.
3)I don't think the kilns will be cheap to maintain in the medium term. In the short term they might be until one of them needs to be relined. The hoisting machinery and weighing machinery is very old. Who will be controlling the kilns? Who will be keeping the dust in the area clean? Who will be maintaining them? The kilns will need a dedicated workforce of their own, not a cheap operation. The CO2 compression is another issue.
4)I don't think the quarry has been really profitable for a long time. Despite counting the overburden as 'stock'. Perhaps Adelaide is about to become a boom town but I doubt it.
I agree that dividends are not likely. Beyond that I expect the bi carb plant to close within 12 months on the realisation it isn't profitable. That will probably be triggered by an expensive machinery failure.
PSH will no longer have any advantage in the market place over other importers operating on shoe string budgets.
I can't imagine any capital gain. The price might bounce to 10c on thin, misinformed trade. Its unlikely to go over 12c.
I expect the delisting and demise of PSH within 18 months.
bacci
PSH Price at posting:
9.0¢ Sentiment: Sell Disclosure: Not Held
