RE:RE:RE:RE:RE:Salesceetong wrote:
I wish we had a clue as to why this discount exists in the first place. With Glencore out from April 2020, LGO's product mix should fetch a premium rather than a discount vs. the benchmark. Obviously management's explanation (trailing prices) doesn't cut it as the discount exists in both cases, increasing as well as decreasing price environment.
V prices stared their decline in March and continued to decline in April, May, June and July. So we are in a declining price environment for 4 months now and the avg. quarterly price in Q2 is just 3,36% higher than that of Q1. Accordingly, there should not be any discount in Q2 at all. Nevertheless I do expect one, possibly double digit.
Should that really happen, I hope this will trigger some serious questions during the call. I knew "trailing prices" was a lame excuse when I heard it and I would have asked a follow-up question. Unfortunately Jim Young swallowed it.
As much as I'd love to be surprised positively, my experience with this company tought me not to expect anything like it.
Did you notice they bought 508tV, almost 1/6 of what they sold. What's the story behind it? Do they have to buy this material in order to fulfill off-take agreements? If so, is this due to transportation constraints or due to lack of own product? What's the margin on the purchased material? I suppose it's negative.
According to AsianMarkets V2O5 reports for March the avg price was $12.10. (recorded on my spreadsheet).
The average price of V2O5 for March was $12.10.
The average price for the months March, April and May was $11.30.
Therefore the trailing price should be slightly more than the benchmark for April, May and June.
GL