Iofina Share Discussion Threads

[woodpeckers] 21/11/2014 12:56

Great research as always super, many thanks.

[germanicus] 21/11/2014 12:31

rogerbridge 21 Nov'14 - 11:42 - 27007 of 27007 2 0


So, longer term it looks like IOF are sitting on a goldmine.

________________________________________________________________________
Blimey! Gold as well as Iodine, water, oil & Helium....what a result! :)


G

[che7win] 21/11/2014 12:30

Quite a strong move upwards in oil today...

[rogerbridge] 21/11/2014 11:42

So, longer term it looks like IOF are sitting on a goldmine.

[superg1] 21/11/2014 11:28

If RB fold it gets worse, even more so if Cosaych go too.

The SQM NV mine is at risk due to the Chile drought, it's the one SQM list as at risk.

The market would see far worse circs than it saw in 2011 if the Chile gov suspend water rights in the Tamarugal area.

Inventories are not what they were pre 2011. With production no where near filling the rise in demand.

I will be keeping a very close eye on events surrounding the national reserve and water conditions in that area.

[superg1] 21/11/2014 11:17

The SQM story is in the header.

Going on their own figures they will produce this year roughly what they did in 2005.

As it stands from details available, this market is false, and has been all about inventory unloading, with a significant production shortage looking set to kick in during 2015.

[che7win] 21/11/2014 11:00

We've all been buying mate, accept you, you were telling 'Banksy' to hold off 10p lower.

[arlington chetwynd talbot] 21/11/2014 10:23

I take it you've been buying Banksy? Not a bad result last night, well done.

Lend me 1m shares for 12 months @LIBOR + 5% ;)

[sandbag] 21/11/2014 10:18

Meanwhile IOF's production goes to it's chemical division. Hopefully they will raise their production next year and start selling to others when the price of iodine rises.

[superg1] 21/11/2014 10:10

1MM

I'm doing some numbers work on SQM and it's getting very interesting.I'll put the findings in the header.

No one can accuse them of intentionally hiding the coming shortage. It's obvious if you read their reports in detail, but analysts simply don't bother. I don't blame them, they are 300 to 400 pages of information in each report.

[jbe81] 21/11/2014 09:50

ORM. Finally got a permit today after a LONG wait, would expect multiple bids for the company

[madchick] 21/11/2014 09:27

che, sorry if I forgot. I was really mostly surprised that SQM actually stated it publicly as their strategy, given that they usually avoid saying anything concrete!

[che7win] 21/11/2014 08:55

mad,
that's what we discussed yesterday.

[captain_kurt] 21/11/2014 08:48

Very interesting posts. Alot of light at the end of the Iofina tunnel.

Good to see 100k LSE on the bid from level 2 this morning

[superg1] 21/11/2014 08:34

The only twist in the game would be the recent raids.

SQM are unlikely to have known about those and the $82 million tax fraud which popped up just days before SQM results

So I would imagine there has been an amount of high fives going on at SQM re Cosayach.

[superg1] 21/11/2014 08:30

Here is the line. It couldn't be any more blatant.

'As we have mentioned in recent quarters, the lower revenues in this business line are the result of lower prices. We are working to recapture our market share, and market prices have reflected these efforts.'

They have dragged the price down knowing Cosayach and co had inventories to dump. They also knew RB was in serious trouble and Cosayach with a $70m to play plus more to come re State street bank. The IRS move just adds to it all.

[superg1] 21/11/2014 08:25

Mad

Well spotted I was mid typing so missed your post.

There is a more direct comment on the topic in their results.

They have engineered this to drive the weak Chile operators into a hole from which they can't escape.

It also makes Cosayach assets far cheaper should Cosayach go belly up which seems likely. SQM are very interested in lithium potential that Cosayach have, it formed part of a court case that SQM lost on who held the leases.

[superg1] 21/11/2014 08:21

I've been waiting for folk to spot a line in what SQM said yesterday.

It partially explains why the price is low.

The one thing that hasn't made sense for months is the price.

RB and Cosayach simply don't have anywhere near the capacity to supply SQM customers.

SQM closed a mine other than mentioning in in one line in a near 400 page document they haven't declared it.

If SQM said No we are not supplying at $36 per kg where would their customers go. The answer is there is nowhere to go.

They are complicit in this price drop and it's divisive, they are clearly looking to throttle others, and create an iodine production shortage next year. They know at some point the inventories will run dry and that overall production has dropped by some margin, yet demand is rising.

They have actually stated it. Then if you know about the mine and plant closure it all makes sense. Then there are comments in the conference call to back it up.

SQM too clearly think through 2015 there will be rising prices due to an iodine shortage.

I'm glad they are finally admitting it. The production figures simply didn't stack up, this is a false market intentionally created.

[madchick] 21/11/2014 08:13

I see SQM transcript now out. I thought the last bit sounded (I must be wrong!) as if SQM were basically saying they were driving the price down until they'd achieved their aim of 30% of the market:

"But we have said in the press release regarding iodine for that we expect downward trend, to be a specific – to continue during the fourth quarter of 2014. And that is the change also that we could continue into 2015, until we reach one third of the market and we said what we have been looking for."

Transcript:

[che7win] 21/11/2014 08:05

No wonder were up, I assume two big buys.

[festario] 20/11/2014 23:22

When I travelled back from West Africa recently, I found that I couldn't stop buying raffle tickets, it was an irresistible urge.
I was very worried that I might have caught tombola!

[pnetol] 20/11/2014 21:51

superg1 - 20 Nov 2014 - 14:40 - 26982 of 26988 - 1On the weather it's heading north.I heard on UK news this morning that it was even below freezing in Hawaii.If you take the media at face value it sounds drastic. But if you look, it did go below freezing point in Hawaii, but on Mount Mauna Kea which is 14000 feet above sea level.As the Chair of OBT said. There is more chance of Ebola hitting Clerkenwell road in London, than it getting to East Africa. The transport and trade links between Europe and West Africa are numerous, but are virtually non-existent re east Africa. London is also closer.Slightly off topic, but v amusing to those of us that were there when he said it, and the reaction of the audience as he had just come back from Africa, it was v amusing

[battery] 20/11/2014 20:12

Shorts on IG all closed again.

[superg1] 20/11/2014 16:34

One SQM comment I didn't mention.

They report a drop in iodine price of 23% over the year, but that's ok as they also report that they have reduced their iodine production costs by 15%, over the same period.

What they still haven't mentioned is that they shut an iodine mine and that amounts to more than 15% of their production. So it's obvious why iodine production costs have dropped 15%.

They quote $130 mill saved on that front and $40m of that directly attributed the the weak peso. So now we know the price factor to consider should the peso strengthen in the future.

They talk of potential lower prices in Q4 and a chance it continues in early 2015. They seem to be indicating they are reducing their inventory too.

The uncertainty about the bottom of the curve is the unknown inventory that is left re others.

Overall it seems pretty clear that like us they suspect there will be a tightening of supply in H1 2015.

They refuse to discuss their strategy around that when asked. It seems they are expecting and assisting a shortage next year.

The plan seems to be let the others offload in desperate times while they have inventory and keep the price low while they do so. It leaves some little above break even or worse.