Iofina Share Discussion Threads

[superg1] 26/2/2014 07:40

Longsight

The process to produce iodine is on the web so it's a choice whether to read it not.

Then check out the SQM process on the web and you can see how they are very much different.

To understand the water permit potential again is a choice to look up past and present applications, combined with rules and laws re water. Having done that I'm very confident the water permit will be awarded, in full or in part. There is a decent sized one in Montana in Richland county that was awarded.

Opex much of that comes from fixed costs. Labour, power, employee's chemicals used and royalties. Then the key point on variations is simply down to how much iodine each plant produces against it's fixed costs.

I know come Chile companies have opex in the 30's and 40's and rising. I hear plants like Woodward iodine in the US are struggling badly, so that would indicate their costs are high v current prices.




As for io4 and 5 as many mention, I just hear rumblings from various directions and as far as I'm concerned, as said before, io4 is complete and was complete over a week ago with io5 about a week or so behind that. Perhaps they are waiting for both to be complete before news. If I was in the US I could simply visit the sites, to confirm that.

Perhaps the rumblings are wrong, but I don't think so.

I did a bit of digging re ATUK now cloudbuy, as it looked undervalued, and I did pay attention to what one informed poster was saying and made contact. That was at 7/8p and it's done very well since. Others did some research and concluded it had prospects the market had missed.


IOF seems to be in a consolidation period, after the new team haven't delivered in the way that was promised. That doesn't mean the prospects of high ppm sites have gone, just that decision making processes seem to have been poor.

[cyberbub] 26/2/2014 07:31

Well in my view £100M cap is reasonable at the moment, given that profitable production is underway, substantial expansion is due in the coming months, and of course we own a valuable bit of IP... plus the water wildcard... if we were still at 250p then I would share longsight's concerns...NAI

[ammons] 26/2/2014 07:31

A couple of points.

We all thought we would get the water permit before but we didn't. We still think we will get it (I certainly do). But we might not. Again.

Reports by Roskill and the other more recent case compiled by a company who's name I cant recall are in fact predicting a rise in total world iodine production by 2015. I have not paid the vastly excessive prices charged for the reports so I don't know what the reasoning is. I presume the closed Chilean mines have been taken into account.

Chilean miners will benefit from the big fall in the value of their currency against the USD.

US imports of Iodine may be based upon long term contracts which might need to expire before we can move in.

[johncsimpson] 26/2/2014 07:28

Excellent post longsight too . . .

[cyberbub] 26/2/2014 07:04

Excellent post engelo!

[engelo] 26/2/2014 01:44

longsight: we should all get satisfaction out of our investments and it's good to hear that there is satisfaction in non-investment too! Think we can agree that this share is totally boring....er NOT :-)

Some of your doubts are reasonable, some are not and some are simply 'glass half empty.' A few points:

Yes we all want an update: but so do most of the shareholders in most of the cos on AIM. This one is particularly important as it will potentially announce doubled production, tell us whether the new management can deliver against the fairly modest schedule they have set themselves, and whether they have learned to write RNSs that don't auto destruct.

Optimisation of a new process from my PoV is very much to be expected at this stage. Whether you see it as "not working properly & we are trying to fiddle with it to sort it out" or "not working to maximum potential yet but we have identified improvements that can be made" is purely glass half full/empty. I02 is a quantum leap from I01, and I03 from 102. But it's all relative: all 3 plants are producing quantities of high quality product.

Opex is at $21.5 per kilo in the broker notes, ie about half that of the competition. You can't rationally make a negative out of that. Boggle (16284) has pointed out why it should reduce with time, as IOF claim it will.

Price of iodine: increased production by IOF will drive the price down ONLY if total industry production increases as I think you have assumed. This is very much not the case: please look back on extensive research that SG has done on the thread particularly regarding Chile (No1 in the world), where high opex mines have already been forced to close. Also Japanese producers (No 2) have major problems too (also published on this thread). IOF are the only producer that is immune to a lower price.

As a first target market for IOF, the US imports ca 6000 Mt pa and would evidently benefit from a home source. And that's a small part of world demand. IOF have already sold to India.

Value of water: Yes we will get the permit. Based firstly on what IOF have said (various posters have discussed this with the directors) and secondly on extensive knowledge of the permitting regulations which have been published on the thread.

OPex is likely to be very low (common sense: you just have to pump the water out of the MIssouri) and estimated prices for cold and hot water and cost of heating have been published on here. And (as you may know) there's much more to the water business than this permit, so I agree that your hunch on water is correct :-)

edit: you haven't critiqued the oil and gas assets yet, so look forward to that :-)

[bogg1e] 26/2/2014 00:44

optmisation is about getting the iodine extraction rate from about 80% to 98% when the system is fully customised to the particular brine stream being processed. This depends on brine temperature too, but even in an unoptimised state the plant is still producing good iodine output.

[longsight] 25/2/2014 22:03

Everyone seems to want an update. Be careful what you wish for. All the recent updates seem to have done is damage the share price

by the way, what is "optimisation"? I understand it to be an euphemism for "not working properly & we are trying to fiddle with it to sort it out"

If I am right on this word "optimisation" then how anyone can extrapolate opex I have no idea. I believe this optimisation stuff was still ongoing at the last update. Over a year now & still no clue how well the iodine from brine process works.

I don't wish to consider the impact on the price of iodine if IOF actually does get the system working properly & ramps up production as well. I assume the more they produce, the greater the surplus, the lower the price [I doubt how verifiable all the cost curve data will prove to be].

I don't hold the shares & am not short either. I enjoy reading the thread ...

On the value of the water, I can make no sense of its value - though my hunch is this might be of real value & who knows the iodine business might be worthless. Will they be granted the water rights? No clue & I certainly will not be relying upon "well informed" / "well respected" posters on here.

Until I see actual audited accounts with a proper breakdown on costs I can't get any idea on what opex is.

[engelo] 25/2/2014 21:52

Bob I also hope for an update on their plans, and some clarification too.

'These plants will bring the number of plants to nine with the anticipated inclusion of some additional mobile plants.'

A really awful sentence, and someone's been paid good money to write it. Think we've all taken it the same way, ie

'These plants will bring the number of full size plants to nine. Some mobile plants are also planned.'

It's highly ambiguous though, especially with that sneaky 'up to' in the previous sentence.

Very unambitious also: hope they will revise things upwards when 4,5,6 operational and 9 months of the year still remaining including the optimum months for construction work.

[bobsworth] 25/2/2014 20:36

Looking forward to an update soon on:

"Current planning now envisages construction of up to three additional full size plants in 2014 beyond the plants currently in construction. These plants will bring the number of plants to nine with the anticipated inclusion of some additional mobile plants. The planned mobile unit's conceptual design is being finalised and the Company is planning to seek turnkey contracts for construction shortly. The number and location of these mobile plants is under evaluation."

Taken from the 2013 Review and the 2014 Outlook

[bobsworth] 25/2/2014 20:31

PUGUGLY with reference to your post 16268 "work in progress"

Where you raised the valid point - I think your assumption that IOF 1& 2 are supplying all the chemical requirement may be on the high side as the 2013 Review and 2014 Outlook stated that "the three combined plants are averaging in excess of 1,000 kilograms of iodine per day, satisfying the Group's internal iodine demand while building inventory for future outside sales. "

On checking the 2013 Review and 2014 Outlook I note that it states that:
"Although not fully optimized, the three combined plants are averaging in excess of 1,000 kilograms of iodine per day, satisfying the Group's internal iodine demand while building inventory for future outside sales."

In making my assumption that IOF 1 & 2 are now supplying all of the chemical derivatives requirement, I have assumed rightly or wrongly that these two plants are more optimised now especially IOF2 with more to come on that front.

Not knowing whose right on this key point It would help if we had an operational update soon from Iofina with revised output data

[che7win] 25/2/2014 20:13

Rainbow,
Look at posts 13373 and 13442.

[gadolinium] 25/2/2014 20:04

Hi Engelo, I too having been trying to get a handle on the Indian iodine imports data from a slightly different angle. The problem is that Zauba lists so many different grades which seem to vary in price depending on the country of origin, size of shipment and time of delivery making any average price difficult to calculate. So I tried to simplify the picture by looking at the range of prices achieved for just one specific grade i.e. unprilled 99.5% min solid iodine, ignoring all other higher or lower grades.

For February to date: Country of origin, min-max price in $/kg, number of shipments (n) and total quantity shipped (MT) are as follows:

Chile, $39.7-48.24, n= 8, 56.2MT
Japan, $46.19-48.83, n=2, 11.5MT
Azerbaijan, $43.22-43.22, n=2, 13MT
Indonesia, $52.9, n=1, 1MT

Across all countries the total imported was 81.7 MT with an average price of $42.07/kg (median $43.22, edit). Even narrowing down to this one grade there seems to be a wide variation in price, with Chile/Azerbaijan being the cheapest supplier and Japanese/Indonesian iodine selling at a premium.

[meadow2] 25/2/2014 19:20

rainbow23 - keep watching and note the news coming forth between now and when 2013 year-end results are reported (early May I think). You will then have a clear idea of the future path of Iofina.

[roger melly] 25/2/2014 19:16

Blimey Rainbow you are a lazy git! Do some research ffs 👿👿

[rainbow23] 25/2/2014 18:44

I'm looking to invest in growth stocks which have recently suffered heavy falls and may now be in recovery mode. This one caught my eye but I know very little about the Company or what they do. Am I likely to get a decent return over 12 months or is any recovery more distant. I would welcome the comments of the more learned members of this board.

[neddo] 25/2/2014 17:35

rns tomorrow

[che7win] 25/2/2014 17:27

engelo,
the latest Indmin article bodes well, it looks like we're nearing the bottom of the iodine cycle. That ties in with the Indian price difference between January and February (minimal).

The Chilean projects are feeling the pinch, hence many shelved last year including SQM and Sirocco.

Stable iodine prices should lead to increased investment
By Laura Syrett
Published: Tuesday, 25 February 2014

Rebalancing of market positive but high-cost Chilean projects feel pinch

The steadying of the iodine market at prices of $40-50/kg could strengthen the industry in the medium term as supply-demand trends become more predictable.
The majority of market observers agree that the fundamentals of the iodine industry remain strong, while some have suggested that the weakening of prices in...

[engelo] 25/2/2014 16:39

che: had another cut at the Zauba data. Puzzled by apparent similarity between Crude and Prilled prices, so filtered out last month of Prill and Crude deals and totalled the kgs and costs.

In this sample prices are very similar around $43. Crude iodine imports about 28% bigger than prilled.


Total kgs..total cost..INR per kg..$ per kg:

Prilled iodine (20th Jan - 20th Feb)

79,200 210,690,205 2,660 42.56

Crude iodine (21st Jan - 20th Feb)

101,600 273,750,481 2,694 43.11





101,600 273,750,481 2,694 43.11

[engelo] 25/2/2014 15:24

gad: apols. Mystery then :-)

[gadolinium] 25/2/2014 12:07

engelo,
The Chilean port workers were the ones on strike.

[engelo] 25/2/2014 11:34

gad: presumably the strikes are at the mines, and exports are continuing from stockpile?

[gadolinium] 24/2/2014 23:14

Iofra:

Yes, maybe it is a surprise, but I am just the messenger so can't really comment further on that.

I notice from the zauba site that supplies of Chilean iodine to India have continued, although they are somewhat down compared to January.
Landings of iodine at Indian ports from Chile up to the 21st of February accounted for 99.5 MT amounting to 53.4% of total iodine imports by quantity to that date. This is somewhat down from January when Chilean iodine accounted for 62.85% of total iodine imports for the full month.

The sea transit time from Chile (port Atofagasta) to India (port Nhava Sheva)the main iodine port is 30d 15h, so although one might expect the January strikes to be reflected in the above figures a full picture may not emerge until the end of the month.

So far this month zauba gives the average iodine price achieved at Indian ports as $41.5/kg. But, this figure has to be treated with considerable caution since the iodine HS code 28012000 used for this calculation includes all grades of iodine from 90% crude to premium prilled and I suspect also includes some anomalous products such as iodine-povidone which only contains 9-12% iodine and sells at a much lower price.

[iofra] 24/2/2014 22:09

gadolinium:
Surprised at the statement that iodine shipments were unaffected - I can't find a record of any shipments from Chile arriving in the US in February thus far - from Japan and Belgium but not Chile.

[che7win] 24/2/2014 21:32

Copper chart also recovering slowly which will support the Peso.



Incidentally, latest price on zauba for iodine prill import from Chile:

"20-Feb-2014 IODINE PRILLS Chile Chennai Sea 3,115"

which equates to a selling price of $50.19 kg.

Price declines seem to be slowing, I expect like most years iodine demand slows up to the Chinese New Year and recovers after.