RE: PRICE DROP?The reason for the price drop is linked to the news release from nif.un. This will obviously impact che.un as well.
The Noranda Income Fund (TSX: NIF.UN) reported today that it is experiencing a significant drop in sulphuric acid demand.
Sulphuric acid sales have slowed dramatically since early January because of the sharp drop in industrial activity. In addition to reduced demand for their products, sulphuric acid customers in the US have seen their competitiveness reduced by the stronger US dollar. These factors have resulted in a drop in sulphuric acid orders as customers have cut production to reduce product inventories.
The Fund's annual production of sulphuric acid, a byproduct of zinc refining, is approximately 400,000 tonnes. The Fund sells sulphuric acid through an agency agreement with Xstrata Canada Corporation ("Xstrata Canada").
The production of zinc and sulphuric acid is linked. Should the demand for sulphuric acid not improve, the lack of storage tank capacity may impact the Fund's ability to produce zinc. In an effort to alleviate the problem, Xstrata Canada is pursuing increased contractual and spot sales, including sales into the international vessel market and investigating alternative storage options.