I feel the pain of fellow holders, and likewise feel the anxiety...

I feel the pain of fellow holders, and likewise feel the anxiety of a seemingly spontaneous trading halt. Trying to keep a logical outlook, the primary concerns are that the material revision in guidance will be broadly negative, and collapse the stock even further. Judging by this thread, consensus for those with negative outlook centres on China and the trade war, as well as an exacerbation of logistics issues.

I don’t think it’s China related. Though I certainly heard the rumours that local producers are on the rise in China, I don’t buy in to the argument that they could adequately replace A2M’s supply. I mean, these local producers existed previously, and the market chose A2M (and indeed other ANZ options) in a veritable landslide. So, is there a risk of supplanting? I guess, there’s always a possibility, but I rate it as exceedingly low.

On that basis, are we heading towards a tariff on A2 product? Again, I think not. For the same reason they won’t tax iron ore, but they will tax coal. They have options when it comes to coal, either through viable alternative supply, or even gas or renewables. They do not with Fe, and likewise do not with milk. I obviously cannot speak for the Chinese Government, or any government for that matter, but it does seem logical.

I do believe there’s a decent chance there’s a negative announcement that stems from additional supply issues, or a belief that they won’t reach the targets they set, given there’s a logical reason to assume this. I am by no means certain, and rate it as a 50/50 chance. The other 50% for me is a positive outcome based on a resurgent Australian economy, that the Government has essentially admitted has reacted well beyond even their wildest expectations, and that their budget predictions were wildly off. The economic bounce back could it have somehow swerved A2M altogether, and though they were certainly factoring in some improvement in supply chain and successful exports to China, I believe the domestic offset will have a profound effect, similarly to the Morrison Government’s Budget.

I guess we will find out soon, but that’s my 2 cents I guess

Good luck to all holders.

RB