Ferrexpo Share Discussion Threads

[tsmith2] 01/11/2016 10:06

Finding feet and forming base...good to go me thinks

[bamboo2] 01/11/2016 09:24

V11SLR, thanks. I have seen the rns's, and just looking to explain some of the recent liquidity. Had they disposed of more on the open market, could there be another rns due, once the sell order was complete?

[pbutterworth1] 01/11/2016 09:23

Thanks Bev.
BBD - Yes....Much lower share turnover today with share price starting Northward drift....

bigbigdave1 Nov '16 - 08:44 - 3784 of 3786 0 0
Chart base forming here imo

[jjhbev] 01/11/2016 08:59

Happy November!

We are now starting the penultimate trading month of the year with a share price that seems – in relative terms – to be under a bit of pressure to hold at £1. Personally I cannot see why this should be the case, but it is. I suppose that there are two primary reasons:-

a) The share sale/placing – both its immediate impact and the concern that it will be repeated next year
b) With the share price having risen so much in the past month investors are taking profits and sitting tight. After all, the company is not due to make any announcements until 2017.

I have taken the opportunity to replace and add to my holding driven by the fundamentals as I see them – i.e.

1) The iron ore price is apparently holding strong
2) China data is pretty good
3) Coking coal prices are very strong – with futures higher than current prices – driving increasing demand for higher grade ore and particularly pellets where supply is severely constrained
4) Base metal prices in general are strong (note Zinc, Aluminium etc.) so it’s very unlikely that there is a speculative bubble focused just on iron.

So, I really do think that fxpo has a heck of a lot of upside potential.

If we look at some basic financial fundamentals we can see:-

For the half year to 30th June the figures were:-

Average Iron Ore Price = $52
Average price achieved by fxpo = $76 therefore average premium was $24
China pellet premium averaged $17 and at end of period was quoted by fxpo =$22 (Atlantic etc. was higher)
EBITDA = $160m
Net profit for 6 months = $78m


For the current period:-

Average Iron Ore Price for first 4 months = $58
Pellet premium = ? (see market update below) Premiums for longer term contracts are often negotiated around this time of year for the year ahead. At the mid year results presentation the CEO was talking in terms of premiums in the low/mid $30s. For the year ahead =???

Pellet premiums are clearly much higher than in the first half and look as if they will remain very firm driven by environmental issues, exorbitant coking coal prices and supply constraints. The following comment was posted yesterday on Hellenic:-



“Steel mills have begun settlements after receiving blast furnace pellet premium offers for 2017 at $45/dry mt, with annual gains expected to surpass 25% on high demand to boost quality of burden and as supply remains constrained.
Pricing at least in Northeast Asia was heard getting established for premiums to settle at slightly lower levels than the offer, according to market talk Thursday.
A European source said he received the offer level from Vale, but added the Brazilian group has not yet concluded any agreements for volumes next year. Other European sources last week had no settlements to share, but confirmed negotiations.
Another supplier was not yet aware of settlements, but stated the offer level was well-known, and it would not be surprising for agreements to happen below this. Several economic and steel and raw materials market drivers would lead to an acceptance of higher pellet prices from last year’s accords at a headline $32/dmt level, he added.
“Demand for high grade iron ore was encouraged after the spike in coking coal prices in the third quarter of 2016, as the higher the Fe grade the lower the need for coking coal in the steelmaking process,” Vale said in a quarterly statement.
The prices heard are lower than current spot prices, while some suppliers had begun to price additional tons accordingly with the new annual premium target, said a source.
S&P Global Platts assessed estimated Atlantic monthly contract blast furnace pellet premiums at $35/dmt for October. Premiums moved higher as new fourth-quarter pricing in the mid $30s, and spot interest ahead of annual offers took the market up from earlier contracts settlements.”

DYOR, but (if you are prepared to accept the Macro & Geopolitical risks) IMO there is very significant upside here – with 4 months of results already locked in and the fifth currently looking even stronger!

[v11slr] 01/11/2016 08:49

bamboo2 - no, see the RNSs.

[bigbigdave] 01/11/2016 08:44

Chart base forming here imo

[pbutterworth1] 01/11/2016 08:43

I don't know about the 7m. I think its starting to tighten up today

[pbutterworth1] 01/11/2016 08:41

yes, I think Fruit knows what he is doing

[bamboo2] 01/11/2016 08:41

Bakala sold 63m shares in the secondary placing, from original plan to sell approx 70m shares.

Is it possible that the balance of 7m have ended up on the market in the last few days?

[bamboo2] 01/11/2016 08:40

pb, agree with what you say, but think Fruit probably knows this already and is being sensible.

The difficulty with stops is the level at which they are set, rather than their use.

[pbutterworth1] 01/11/2016 08:30

...FXPO will be less than 3.5% down today...

[pbutterworth1] 01/11/2016 08:29

Fruit, the problem with your stop approach is you have 'forgotten' what this dip is all about. Its not about the company at all. Its about a approx 10% share mop up with more shares than takers. This situation WILL reverse, but it takes time. Stops don't work on shares with the biggest gains. Buffet didn't make his early money on stops :-)

re-

Fruitninja8431 Oct '16 - 19:18 - 3775 of 3777 0 0
@telbap

For sure, but if a quid does not hold there is no way i am watching my position here go backwards! I cut and run ruthlessly and look for a lower level to enter. I made big money here and if i have to give a bit back fine with me..

[mustau] 01/11/2016 08:13

Added a few under 1 and a few more this am. Will take some more if they take below .90, hoping not.

[fruitninja84] 31/10/2016 19:18

@telbapFor sure, but if a quid does not hold there is no way i am watching my position here go backwards! I cut and run ruthlessly and look for a lower level to enter. I made big money here and if i have to give a bit back fine with me..

[telbap] 31/10/2016 19:13

Tight stop will get you stopped in this for sure, look at the swings this stock can do!!

[fruitninja84] 31/10/2016 15:45

Not for the faint hearted! Had some sub £1 having done a-lot more in depth research and a big thanks to Granto2 for helping me understand the business a bit better. Using a tight stop as always...

[mustau] 31/10/2016 15:39

This and Kaz both today, something brewing, hope not!

[shaf200] 31/10/2016 15:34

Will go in again at 90 and 80 if it ever goes there....

[tsmith2] 31/10/2016 13:03

Think we are readying for move up, indigestion over

[tsmith2] 31/10/2016 10:09

What blog?

[mark_jm] 31/10/2016 10:04

The Wigmore street Holdings transaction seems to have had the effect of pegging the share price below 110? Surely that wasn't the intention of the purchaser? Unless they are also responsible for some of the other 15 m shares that got bought on Friday as well, may they are accumulating in the open market now, and guess a lower price would be their short term objective in that respect?

[pbutterworth1] 31/10/2016 09:49

shaf - read the blog and rns. Nothing serious

[shaf200] 31/10/2016 09:25

Why the sudden "crash" last week? Been away...

[shaf200] 31/10/2016 09:23

Thinking about topping up? Any reasons not to??