GREY:FTPLF - Post by User
Comment by
OptsyEagleon Dec 05, 2011 12:47pm
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Post# 19292505
RE: from cannacord
RE: from cannacordFrom Canaccord:
Further, he has recently seen announcements that a few of the high cost mills in China have stopped producing dissolving pulp, that should help stabilize the current supply/demand situation. Gilmer does not
anticipate substantially lower prices.
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You see, that is my main point about Fortress Paper. Not only is it rediculously undervalued at current DP prices, but even if they went lower, Fortress Paper would still be making a profit, when their competitors will not. This will force back up dissolving pulp prices. One cannot control the price of a commodity, but FTP management has shown that they understand this business and by ensuring they have a bottom quartile cost structure, that in itself will ensure their success. As many analysts have stated, commody prices will want to gravitate to the level of the higher cost producers. For Fortress Paper that price is very profitable. Add to this forward contracts with floor pricing and you have a very profitable future going forward.