RE:RE:Q4 Forecast
Because I have seen quarters that Glencore overpaid and quarters that it underpaid LGO, I believe this is how LGO does the initial invoice. When it shipped out their product, several times in that quarter to Europe, they used the MB market price of those several shipped-out days to create the invoice. Therefore, it all depends on the average prices of those several days, they are either rewarded with an over average or under average price for that quarter. If they got an under average price for that quarter, they are likely to be rewarded with a positive remeasurement in the next quarter, assuming V price is stable overall. If they had been rewarded with a higher than average price for that quarter, they are likely to be dinged by a negative remeasurement in the next quarter. Making sense. This is reverse logic that should be used for LGO trading. When it is getting a poor quarter because their average sold price is less than the average price of MB in that quarter, after a week of sell off, it should be time to become aggressive. Similarly, if they are rewarded with higher than average price for that quarter, it is time to sell, because the over joy will eventually be turned to grief.