Hydrodec Share Discussion Threads

[euclid5] 12/4/2013 15:47

Mr A Black certainly thinks so with his recent 2m purchase at 10.25p

[dirty75] 12/4/2013 14:27

If the share price slips then surely a great buying opportunity.

[capricious] 12/4/2013 13:47

I don't think the small fluctuation in sp, is anything to do with the JV or lack of JV news.

It's still a little early, I'm expecting and hoping for an update by end of April.

Personally I'm seriously not worried if we don't hear by that date, the setup and work done by the company on this deal, has me far more confident that the JV will be signed. The changing market dynamics (US), the stable and improving pricing in Pale 60 (against other naphthenic grades), the narrowing of the spread to the resale value of Superfine. The heating up of re-refining competition, the proof of concept for group II/III... the world class board, the headway they are making into utilities etc, I think if the partner had planned to join when the heads of agreement were signed, the reasons only appear stronger to do so.

The disappointment brought about by the Japan JV, may even add to the attractiveness, as there is potential for the other party to gain some benefit if they wish to see an expansion outside of the US.

[vitamal] 12/4/2013 11:52

Where do these go if no Jv news How long can it

[capricious] 11/4/2013 18:30

Natural gas has seen a rise in prices, and falling stocks.

For unregulated utilities/states, that's a good thing as lower gas prices also drive down the cost of power, giving less room for margins. The regulated market is insulated somewhat with higher rate portion (growing rate base) of a customers bill.

Anyway all this means utilities should see better returns which help the investment in maintenance/new transmission equipment, which in turn is good for Hydrodec's market. The turn around in house construction is obviously good for increasing electrical demand/supply.

New transformers can range from the low $hundred thousands to millions. A 30MW (or if you knew the PF value, convert to MVA) transformer needs around 8-9k gallons of oil.

[capricious] 10/4/2013 15:56

...Meanwhile, naphthenic prices have not undergone any officially announced moves, but sources have indicated that suppliers have bumped up offers on a regular basis in recent weeks. Overall availability of many pale oils is deemed tight, and demand has been spiking recently as well.

Naphthenic prices have been pegged at circa $3.55/gal to $3.70/gal for 100 to 750 vis cuts for general purpose applications. Pale 60 vis, used mostly to make transformer oil, is valued in the high $3s/gal and is also seeing exceptionally strong demand.

[capricious] 10/4/2013 15:52

If they haven't already, a call to asses the material would be excellent idea.

[capricious] 08/4/2013 07:22

Hydrodec haven't said how they intend to spend the money received from the JV buy-in. It may play part of the expansion costs, or have already been earmarked for other capex.

It's clear that the in line with the new board the decision to start spending for future growth (a year now), is starting to and is poised to return on that investment. I hear people complain about the higher loss rate, but without the ground work, we would certainly not be hearing about new applications, pilot plants, or JV deals etc.

[euclid5] 07/4/2013 17:54

I think that is the key factor holding the price back - funding capex on 50% of the US JV - but Director's recent purchase of 2m is good news - but he has millions behind him so any small set back will not bother A Black much - but can't see a discounted placing below 10p as he would not of bought his 2m if that was the caae

perhaps they may get another CV Loan instead of equity dilution

[sueyou1] 07/4/2013 17:07

dreamtwister, NK has nothing to do with transformer oil markets in Japan. Nuclear in Japan has nothing to do with transformer oil either.

"The potential market for treatment of contaminated and used transformer oil in Japan is assessed as 600 million litres in place, and up to one billion litres over time including recycling of transformer oil for equipment decontamination through oil washing."

And that does not even include industrial and motor oils which HYR are also working on bringing to market.

[sueyou1] 07/4/2013 17:05

euclid5, both very positve. Still undervalued due to the question of funding expasion hanging over the stock IMVHO.

[adventurous] 07/4/2013 16:58

dreamtwister - "have held for cgt reasons,but with japans nucleur fall out and tensions with korea,imn pretty scepital about hyr focus on japan,"

You must be absolutely crazy, if I had such big doubts forget about capital gains, I would have sold and moved into a company I felt happier with and then shorted :-).

[euclid5] 07/4/2013 12:19

Hello SueY1

what is your take on the US JV deal that opens up the N American market in transformer / industrial market for HYR plus the recent Director buy of 2m shares at 10.25p

recall Edison note about a possible 25p npv that excludes the US JV deal

Thanks

[capricious] 07/4/2013 11:29

It reiterates what has already been said, but the interest is out there... ok it's all potential, rather than realised, but they seem to be moving pretty quickly on this. By being considered for a grant, the Australian authorities are not going to miss an opportunity to help create jobs and expand a growing industry.

In the US huge amounts of tax payers money, $100 million+, is being spent on businesses with no proven track record, and one by one they are folding. Not sure why Hydrodec wouldn't be a grant candidate, maybe with a US partner in a new JV, that would change.

[dreamtwister] 06/4/2013 11:26

....nucleur energy has been sold to the public as a propaganda tool of clean energy and thorium energy has been put into the archives as it c annot produce W.M.D. . .

[capricious] 06/4/2013 11:05

The Mexico situation is a little sticky. If they can't find a shipper to Australia, that channel looks closed. As I believe it is prohibited to import/export PCB material into Japan, I'm pretty sure this is even more so into the US. There are exemptions if the material originated from US territories.

I wonder if they have looked into licensing deals in Mexico, their economy isn't doing to bad, and future growth looks good. Better to process the feedstock at source. It would also make it easy to export cleaned oil into the US.

[capricious] 06/4/2013 10:51

I hope we eventually get a clearer picture as to the aborted Japanese JV.

The following comes to mind

1) Earthquake
2) Re-refined oil not as yet recognised as matching or beating new.
3) Deliberate attempt to hold up progress, i.e with other Japanese competitors. In a similar vein with regards to IP.
4) Local funding, although announcements were worded as if the hold up were not of Hydrodec's doing.
5) Fallen foul of the complex and sometimes secretive way Japanese business is conducted. Reminds me of the film Rising Sun (Sean Connery Wesley Snipes), maybe they needed a Sempai to their Kohai.

It's possible that the business case is not strong enough for such a large upfront capital cost, not long after the earthquake. If this were the sole/true reason*, it seems a little strange that there were plans for three plants. Surely Kobe would've also looked into the financial/market research if there were no viable business model.

Japan imports most of it's petroleum needs, now even more so with the cut in nuclear energy production. This is why I said it's fairly crucial Hydrodec can put the recent proof of concept into production (Australia). If there is a local market disconnect for re-refined transformer oil, the market dynamics for industrial/motor oils, should make the proposition far too good an opportunity to miss. With the high cost of oil in Japan, import/export arbitrage opportunities across the region may exist.

I believe imports into Japan of PCB material would be prohibited, but exports of cleaned oil would not. Looking back at previous company presentations, there was always around a 600M litre figure, as well as the larger quoted amount. The larger amount at a later date being associated with transformer washing.


I wonder if it's possible to have mixed level loading, i.e producing transformer/industrial oils, on demand in the same plant. The chemistry may prevent this, but if the control system can accommodate quick switches, that seems to me to make for better utilisation, at least initially.


Thorium salt reactors are another kind of nuclear reaction. But with regards to nuclear energy making transformer use redundant, I was trying to say that no matter how the energy is produced, nuclear, coal, gas, solar etc, transformers are needed for transmission/distribution and utilisation of the electrical energy. Therefore currently they still require cooling via an oil like medium. There are synthetic/biodegradable alternatives, but they are in the minority.


* obviously if it was a clever blocking tactic, then the analysis is somewhat moot. But a delay tactic itself means there was sufficient potential for market disruption..

Once the US JV is signed maybe we'll get a better analysis from edison. There'll concentrate on the US side of things, but I'd like to see if they can shed some light on the current market in Japan

[sueyou1] 06/4/2013 08:52

pr100, it sounds from all the historical updates on Kobe that they didn't do anything to get things moving. Maybe they wanted to hold it up, maybe they just had one person doing the work and that person was clueless. From what HYR are telling us, Kobe are no longer in charge of operations, so clearly HYR believe they can do much better by running operations themselves.

[pr100] 06/4/2013 08:44

Good riddance to this JV - but shareholders should be told why it went wrong. Without that explanation, investors will assume that Kobe couldn't make the sums work or that Hydrodec wasn't able to raise its share of the capex.

Notwithstanding its inglorious history, the loss of a JV in a key market has to be viewed as a negative, especially with no alternative route to market yet in place. That JV was the main reason I first invested in Hydrodec and now it has gone; so it won't be a surprise if the share price falls until further news.

We also need to see a new concept study on the Japan market. Why has the potential sales volume been scaled back? Is the market receptive to recycled PCB-contaminated oils? Given the Mexico shipping farce, can PCB-contaminated feedstock be imported into Japan from surrounding territories?

We have been kept in the dark about Japan for years now. A new level of transparency is badly needed imho.

And my faith in the BoD has been damaged by the aforementioned Mexico feedstock problem. How could they announce that deal without first ensuring that the stuff could be shipped? It's embarrassing.

I do think that licensing deals are the right route to market but, like any licensee, I want to see a typical business proposal as we can't begin to forecast future growth without a formula. Is it even possible to sell a licensing deal when Hydrodec haven't yet proven that their own model is profitable?

I'm poised to reinvest heavily here but I need more from the company to enable me to make an informed decision.

[pinkalltheway] 05/4/2013 23:02

Dream: just looked at previous post, I see your a bear, good luck..x

[pinkalltheway] 05/4/2013 22:56

Dream.. I'm not sure understand what this co does.

[dreamtwister] 05/4/2013 22:21

yes thorium energy is a safer solution to nuclear...so many other clean tech energy solution's being developed that transformers will be replaced and hyr technology will be made redundant,althou it doe's not sound like it but i am a investor in hyr since they listed, and have held for cgt reasons,but with japans nucleur fall out and tensions with korea,imn pretty scepital about hyr focus on japan,

[euclid5] 05/4/2013 21:04

I recall the Edison Reserach note mentioned the US JV will require a 50% funding requirement to get them up to 6 trains in their Ohio plant - are we possibly looking at a debt/equity raise here - however A Black knows this already so anything below 10p then I could not see him buy his 2m recently if they are aware of the amt to be raised

[pinkalltheway] 05/4/2013 20:57

I'm beginning to think if this share price doesn't rally soon, it might be taken private, obviously directors believe in the tech & no real debt must be tempting with the potential upside, and all that cheap money out there..!!! And Mr Black in there back pockets, I know what I would do if I were Mr Smale.

[sueyou1] 05/4/2013 19:27

Good bit of news that. Hopefully HYR can make up the lost ground in Japan this year.