Iofina Share Discussion Threads

[superg1] 07/1/2015 13:33

I'd love to know TFC as if had the means and contacts I'd be piling it into storage.

Being an element from the ground my guess is a very long shelf life. Gold has a decent one :-).

Having thought about it, I'm estimating Chile was producing more iodine than now 8 years ago as Cosayach were on over 6000mt.

That's why SQM had a 5000mt plus build up pre the 2011 issue.

I don't want to seem too bullish but surely it's one of the most at risk supply/demand resources out there right now and the situation has never been worse. I'm going on the figures out there.

Looking from the outside without knowledge it seems like a flooded market.

I was going on about a helium shortage well before the buyers attended that Helium auction and got a very nasty shock re the price they had to pay. It was well over what they expected. Two main buyers knew the score and paid well over the old rates. That trend will continue.

One guy is currently raising funds to corner the US Helium market.

[serratia] 07/1/2015 13:32

If stored properly Iodine has an infinite shelf live. If left exposed to air it can sublimate ie go straight from solid to gas phase.

[the fat controller] 07/1/2015 12:55

superg,
Some talk about the shelf life of Iodine. Do we know what this is?
I can't believe it's very short, or there would be no point in building up an inventory. But I would interested to know what it is. Presumably, it can be extended by forming iodide compounds or solutions?
TFC

[monts12] 07/1/2015 12:43

superg
re Chinese gamblers
I once visited Genting Highland casino in Kuala Lumpar. It's nicknamed the Casino in the Sky because it's about 3,000ft up a mountain and only accessible by cable car. These cable cars scurry up and down all day long at a rate of one every 30 seconds or so. Each one is jam packed with Chinese tourists who have only flown over to Malaysia to gamble because it's illegal in China!
When you get up there it's more like a holiday resort complex than a casino. My interest in poker took me to the Poker Rooms: over 400 TABLES crammed with Chinese men and women, many playing Texas Hold Em! I had to queue just to get a seat. And you're right, they were betting in wads of $100 notes on some tables.

Re DJI
I'm just thinking even if it is just lottos, the sheer size of their population and gambling tendancies means they're on to a winner. The link up with Xinhua gives them credibility and access to legal online gambling and mobile sites enabling smartphone access as well.
We shall see...

[superg1] 07/1/2015 12:24

SQM are near critical inventory levels going ion their figures, they can't afford to let it drop too low as they have contracts.

Just one domino toppling like RB could set the market on fire.

With no such events at all, the dominoes are already trembling, but to the untrained eye there is an iodine production glut. lol

Roll on 2015

EDIT

Did you know, that even though SQM closed a mine and plant in late 2013, they have never mentioned it in any news or told any analyst.

All they have said, and gloated about is that they have managed to cut costs.

Corrupt isn't it. SQM investors completely oblivious. If in IOF cost cutting as mentioned they had closed 2 plants I'm sure you guys would feel slightly aggrieved if IOF never mentioned it.

Show me on the web where SQM have said,

"we have cut iodine production by 23%"

They will tell you however that they have cut costs by 20%.

They will also tell you 30% of that is down to the weak peso.

So do the maths and costs have gone up per kg or mt.



.

[che7win] 07/1/2015 12:16

Superg,
I'm not a fan of technology companies generally, but NANO looked a great opportunity on misplaced news from a rival.

They do have a strong partner in DOW, but as I stated above, just a trading opportunity I saw today, it is priced for perfection.

I'm out after 35 minutes with a quick 9% profit.

[superg1] 07/1/2015 12:08

Che re nano

Check Oled. they are already saying it's far superior, so by the time or even before nano dots get traction they will be second rate re screens.

Oled just needs to go large scale for price drops.

Just like all TVs it's the normal cycle. I'll get my nano dot TV near the sainbury's fruit section for £300 no doubt in just a few years then oleds at the same price a couple of years later.

The Mrs however thought a rather plush smart TV was essential so I had to pay the going rate for that ahead of time.

We mustn't forget FUM as on the oversold criteria a troubled fund is still causing the price to crash, when it ends it should bounce well, so I'm watching for that.

One not in the UK that interests me is Dyesol, very interesting solar tech that, and great reported record efficiencies.

[superg1] 07/1/2015 11:59

The SQM figures are in the header they come straight from their own public records.

Early 2011 was when the iodine crisis came. SQM had 5,400mt of inventory pre that and the price took off even though they pumped all they had into the market. Note even though they claim they have a 12,500mt capacity, they never got above 10,900mt when the market was screaming for iodine.

They will have produced less in 2014 (8300) and this year, than any of the years listed.

Their record

2009 Produced 10,100 t sold 7,200 t (inventory + 2,900mt)
2010 Produced 8,800 t sold 11,900 t (inventory -3100 t)
2011 Produced 10,000 t sold 12,200 t (-2,200 t)
2012 Produced 10,900 t sold 11000 t (-100 t)
2013 Produced 10,800 t sold 9,300 t (+1500 t).


As you can see when the crisis hit SQM unloaded their inventory which from 2010 records through to 2012 when they were spent amounted to 5,300 mt.


Last year they produced 10,800mt, but late in the year closed el Toco and the iris plant amounting to a drop of 2,500 mt in production.

That's where I get my 8,300mt current rate from.

They say they are supplying 28% (recent news) of the 32000 mt market this year (8960mt).

So in theory their inventory is now 840mt and in their terms at a critical level. They are in no position to fill any gap should RB fold or other issues arise. But they are in a position to demand more for their iodine when the market shortage hits.

That means a $41.5 mil profit increase for every $5 rise. They would have to produce and supply about 4000mt more now to get the same profit returns.

All they needed to do was cut costs, cut the price, cut production, spend nothing and wait for the blue touch paper to be lit.

I can see the above as I've done the research, but the market is hopelessly clueless. I will never invest on the back of any analyst report and I suggest nobody ever does.

I can't believe the amount those folk get paid for what is to some extent guesswork and incompetence, it's frightening.

The bears do it on purpose knowing it's lies, but why shouldn't they?Some 'professional' official reports generally have the same amount of misrepresentation in them. If they go after bears for it, why not the pro's too.

DYOR.

[che7win] 07/1/2015 11:35

Closed NANO, quick opportunity today, not my cup of tea though.

[senden11] 07/1/2015 11:12

Good, solid contextual information che and sg1. Now, where are those last quarter production figures for our Iodine core asset, as, surely, that's what the market is waiting for and the non-core water saga can be updated accordingly as and when?

[che7win] 07/1/2015 10:58

Risky one this - NANO might be a short term opportunity there.

Too risky for me I feel, short term bounce may be on though.

Edit, got a few at 111p, short term though, won't keep these long.

[woodpeckers] 07/1/2015 10:29

che, don't understand your comment " Would have to transfer out of my ISA for the 20p, so forced to sell." Do you mind explaining?

[che7win] 07/1/2015 10:08

TNCI,
Sold, nice 18% profit for a few weeks ownership. Would have to transfer out of my ISA for the 20p, so forced to sell.

[superg1] 07/1/2015 10:04

Info

'The market' as I found out over the years is generally completely clueless about any share. 99% of the market just seems to chase momentum and hype either way and it has little to do with prospects.

I recall having some BB spats A while back when some were claiming (including the market) that gold would go through $2000 per oz then $3000 per oz (David Rosenberg).

Ben Isaacson is a commodity expert and while he follows SQM closely with a major interest in them he is clueless too, he hasn't spotted the closed mine and plant. He made an observation recently which made me realise I should completely ignore any of his analysis too.

There are very few of us that do solid research. I don't think I do enough.

For the research I have done, it makes me realise just how impossible it would be to track a portfolio of shares.

The truth is the vast majority funds don't follow them, they just react to trends and media/market comments.

No wonder the financial market had such major swings 99% of it seems to be built on hot air and BS.

I'll stick to research as while the market has no clue, I can make decisions on research and decide to back that or not. A matter which I am doing, and will continue to do re IOF especially at these prices. What is the point of all the research if you don't back it. I have turned my back on some hype shares due to research and none of those decisions have been wrong to date.

Unfortunately IOF saw the same hype following and the same headless chicken exit with a load of over-gearing and bear lies thrown in.

In relation to this share, I see a sudden shock upward move in the iodine price this year, if the demand level remains the same.

I am 100% sure IOF will get their water permit, because I have put the effort in to research it.

I have stated what the news will be in relation to the recent objection process.

1 point from one objector on beneficial use. I know without doubt that I am right. If you recall the bureau contested it on that front and the hearing examiner said the LOis were not unlike others where permits were awarded.

The fact is IOF didn't mention some cases where permits were awarded where the LOIs are shockingly poor and possibly false, and they will have those details this time.

It's for the objector to prove Hal don't need the water. If Hal didn't need the water IOF wouldn't have an application in.

I'll list the issues re the iodine sector in another post which explains why I think the iodine market will see a sharp change this year. For the price to remain this low with all the potential events on the way seems highly unlikely. $50 plus later this year imo, but potentially a lot higher if any of the event in the list comes to pass. Interestingly all of them could happen and then we'll have an iodine market price rise frenzy.

Everything is currently stacked on the low end on all fronts from exchange rates to apparent production bulges due to illegal extraction and prior inventory building. The facts suggest a shortage is imminent with no quick way to fix it.

The market may be forgiven as if you read SQM's presentation.

'We have a 12,500mt capacity'

What they didn't put was.

"We are actually producing around 8,300mt and our sales rate exceeds our production. We closed an expensive mine and plant and that is why out costs to produce iodine dropped. We also dumped over 3,500 permanent and outside contracted staff in those cuts. Our main iodine mine is at risk of closure due to the drought as per in recently announced water laws (risk mentioned in our form 20 F). We really needed to move to Pampa Blanca, but market circumstances prevented that. We have no seawater pipeline application in place for our main production area. "

"We note RB energy are also supplying the market at rates beyond their production capacity due to an inventory build up. The same goes for Cosayach who built up an inventory on the back of stealing our water but we have closed their wells through the courts. They are currently in serious money troubles as are RB who look like they will go bankrupt shortly and their mine will close.

If the drought affects our main area and they restrict water rights to prevent damage to the nearby national reserve (already damaged by Cosayach taking our water) then we are stuffed and so is the iodine market.

It's not just us and our 5000mt at the location, Cosayach and Acf Minera are there too which totals about 11000mt based on 2013 into 2014.

With RB on the brink too, in a worst case scenario, which is possible, that would mean 40% of the production could disappear with very little warning.

Last time this sort of thing happened we had a lot of inventory, but we haven't this time and others are running down their inventories too.


I know all the above as I've researched it. If I was an large iodine end user buyer manager, I'd currently be buying iodine at a rate like there was no tomorrow. TBH I think IOF should buy some too and just sit on it, depending on the shelf life of iodine.


Without any of the events above, some of which seem certain to happen, the market seems headed for a production shortage as we move through this year. The first major end user to spot that will prosper, the rest will be buying high priced iodine and wishing they hadn't burnt some bridges over the last year.

[che7win] 07/1/2015 09:29

Bocker,
You perfectly sum it up.

OPEC has always been a fragile cartel, it's worth remembering that Saudi and Iran are enemies for instance, they make an uneasy alliance.

I expect some consolidation within the US frackers, I would put one of our partners, Chesapeake as one of the strongest players out there.

Some retrenchment can be expected until oil settles.

Back to lurking....

[che7win] 07/1/2015 09:15

Info,
You have to realise a few facts here:

1. IOF doesn't have a history as its a new business, the market wants to see evidence of growth and profitability moving forward.

2. It missed expectations of growth last year, but note, it is growing fast, just not as fast as we expected.

3. We still haven't escaped the downtrend that started June 2013, that takes time, chart downtrends can persist and overswing.

I put more emphasis on charts these days, we need high volumes to escape, perhaps the last months quarter figures will do it. The evidence is building that the company is progressing soundly, just read the last results to see the progress.

Look at ACHL for a downtrend that reversed 50% in a week to see what I mean - my point about downtrends overswinging.

4. The iodine price - when the bottom is in the market will be able to price increased margins for the next 12 months, straight to the bottom line.

5. Evidence of the growth strategy, when we further progress, the market can price in the growth.

6. Water application, not priced in at all, market needs to see it happen. However, we are in the final furlong.

For me, the market will have to look ahead soon, IOF has so many opportunities, we are now an established producer with a credible business and protection through leases and patents.

Iodine prices rising will have a major effect on the price without management doing anything to expand production.

[bocker01] 07/1/2015 09:05

That's an excellent analysis Che, OPEC members are not standing together and therefore the cartel is inneffective. Nothing is likely to change unless external producers like Russia stand shoulder to shoulder with them That's highly unlikely and would last only until someone cheated. Which would not be long. The US frackers may reduce new extraction. The effect would be a slowdown in growth not a cessation. Existing sites with sunk costs are likely to be unaffected. As Iofina has been mopping up leases far in excess of its requirements to lock out potential competitors and lock in the future, the effect is likely to be very very negligable. Further, Iofina operates in low oil cost sweet spots and has many years to go to exploit existing leases before it worrying about availability of new ones.

[infoisrealnot] 07/1/2015 08:57

It would appear that the majority of the market does not shares this bull view as indicated by the abysmally low share price.

The share price needs to rise and show resilience to give credence to the bull viewpoint.

[che7win] 07/1/2015 08:53

Saudis know US fracking is a threat, as is renewal energy, high oil prices have allowed others to threaten Saudis oil dominance.

However, 20 years ago, world oil demand was 66m barrels per day.
10 years ago, it's was around 78m Bpd.
Last year, it was around 90m BPD.

The extra demand has all come from non-OPEC oil supply.

There is a small 1.5m to 2m excess supply, that will correct at these prices.

[superg1] 07/1/2015 08:28

Che

When the Oil bubble finally bursts in the future as new tech appears, Saudi are fully aware they have nothing at all to market.

I know they were looking into solar power and desert type mass poly tunnel type tech so they can get into agriculture.

With the peak oil comments it does feel like they are trying to protect their one main income.

It sounds like they are incapable of increasing supplies significantly, so maintain their output while there is an over-supply to knock back the marginal oilies.

Eg

If there was a balance in supply demand now then it seems Saudi can't increase supplies to knock the price down.

If they were capable of huge supply increases why lose 100's of billions in a price war, that they don't need. They need to make hay while the sun shines as when tech replaces many combustion engines they have a problem.

[superg1] 07/1/2015 08:18

ITM power is one I've casually tracked for years, an apparent unloved share in what should be a hot sector, and of hype interest.

4 years back I thought it needed some water under the bridge time, but now they seem to be gaining traction with hydrogen cars now being manufactured and ITM linked to makers.

They have more than one string to their bow and I believe Delta R who knows this thread and is on ITM knows them inside out.

I don't have any but they are becoming more interesting with recent news and more to come, the share price has turned in recent times.

I have no idea re revenue potentially which is something I would need to catch up on.

OBT as you know looks set for some game changer news in Q1, for a share that looks under-valued anyway and has been for some time.

[che7win] 07/1/2015 07:58

Spike,
Appreciate the thanks, I'm just sharing my thoughts and I appreciate others have more expertise than me.

If we focus on Saudi, it's important to know why they are doing what they are doing.

Back in the 80's, there was a supply glut.
Saudi met with the other OPEC members and they all agreed to cut production.

Saudi cuts production, what did the other OPEC members do? They pumped even more!
The price of a barrel of oil fell to $10 and it took years for Saudi to regain the market share it had lost.

That is the key to this all, also the key to SQM maybe.

Just before the OPEC meeting in Vienna last November, you might recall Russia had a side meeting with OPEC members before the main OPEC meeting itself.

They tried to negotiate with Russia for an agreement that Russia would cut production if OPEC did. The meeting concluded and Russia came out saying they were not going to cut.

Russia is a very hard nut to crack, they are stubborn and they have destroyed themselves.
That was the writing on the wall. Saudi refused to cut if Russia wasn't going to cut, they remember the 80s when they lost market share.

US have no coordination for cutting oil, so they can't. Companies need to pump more as margins reduce.

So Saudi looked around OPEC, Libya is meant to be ramping up, as is Iraq, Iran also at lows due to economic restrictions, Venezuela in a mess (they are inefficient and have been supplying cheap oil to the rest of S. America and Cuba who have needed to come back to US).
Saudi is the one expected to cut, they know that no one else could cut except maybe Kuwait and a couple of others, so they aren't going to let the 80s scenario play out and they aren't going to lose market share again.

I respect Saudi, they aren't the villains they are made out to be. For the sake of everyone cutting 10% production, oil would be in the $80s, yet it is now everyone for themselves.

If it gets really bad, OPEC and Russia might agree cuts, there are members like Algeria crying out for a cut, Venezuela is over in China begging for loans.

Saudi has made it clear, they will keep pumping, not surprising after the above and the fact that OPEC has pumped above it's self imposed 30m limit these past 6 months.

Russia is now pumping record amounts in December, Iraq production also ramping up via Kurdistan into Turkey (new pipelines), Saudi also reckoned to be pumping extra into the fall to make the others suffer.

You can see how no one wins unless there is coordination, the market will find a level.
Meanwhile, China is increasing imports and rumoured to be storing the windfall cheap oil in salt mines (US can't as they are already near capacity in their strategic reserves).

Enough rambling, all producers are suffering, Russia might be forced into a corner, but they would rather self implode than cut 😄

[superg1] 07/1/2015 07:50

Monts

re

'Chinese notorious for gambling.'

You are not kidding, I rarely venture into bookies or casinos but had a game of poker in Cardiff post a cricket match, it was stuffed full of Chinese people which was an eye-opener for me and some were just piling wads of cash into machines.


Cyber is NBU Naibu they were talking the P out of that one at the investor show stating that thought it was a big dud. That said Simon Cawkwell apparently went long on it.