Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Nice..it just so happens I might know a little company.................
Continued.....
Operator [70]
The next question comes from Kevin (sic) [Keith] Chau from MST Marquee.
Keith Chau, MST Marquee - Building Materials & Packaging Analyst [71]
A few questions from my end and given we are expecting the strategy there. What I might focus on is just your visibility out to the next quarter. Firstly, fly ash volumes, Zlatko or Ros, are down 10% in July. Wasn't quite clear to me at the release, whether that was a function of supply being constrained or demand falling off. I'm just wondering if you can provide some context there as far as your pipeline goes out over the next month -- I'm sorry, next quarter?
Rosaline Ng, Boral Limited - Group President Ventures & CFO
So for fly ash, in terms of volumes, I mean, we did see a decline in the second half and really was due to lower availability of fly ash. Obviously, with COVID, there's just been significant reduction in energy requirements in North America, so -- plus a lot of the utilities, we had seen a SIGNIFICANT REDUCTION in FLY ASH being produced. So it really relates to the availability of ash.
Keith Chau, MST Marquee - Building Materials & Packaging Analyst [73
Right. Okay. And then the go-forward position for the balance of the year, Ros, is the expectation for that to remain constrained for the rest of the year? Or out of your incremental supply sources, is there any way you can offset that in the near term
Rosaline Ng, Boral Limited - Group President Ventures & CFO [74]
Well, I think the fly ash management team definitely continue to pursue the -- all the supply initiatives that we've spoken about. We've got a slide in the pack that talks about the contracts that we've won and also the contracts that we've lost. So we're trying to keep a bit of a tally of the pluses and the minuses. Some of it will take a bit of time to flow through as we talk about Kirkland, in particular, the pozzolan ash. But we expect that depending on just -- like I said, it's very -- it's a lot of uncertainty around having the impact on the utilities, but we continue to at least progress initiatives that we've outlined on fly ash, on our supply.
Read this below. It confirms exactly what I've been posting. Boral are desperate for Fly Ash.
https://tinyurl.com/yybjfmy3
Why you think fly ash price growth has been so successful during COVID-19 and just in recent years?
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So clearly, you've got a dynamic there where fresh indigenous fly ash supply in the U.S. has been on decline, and that decline accelerated through COVID with less power demand. So -- and then you think about the specification of certain concretes, particularly transportation applications, where you need to have fly ash, that kind of gives you a sense of what the pricing support for fly ash price increases comes from. So it's really going to come back to that trade-off between indigenous fresh fly ash supply versus the ultimate demand, particularly going into infrastructure. But Ros, do you want to talk about that second half versus first half?
Rosaline Ng, Boral Limited - Group President Ventures & CFO [67]
Yes, we did see a little positive up in the second half. And as you know, fly ash, there is an opportunity the fly ash management team look at it at -- twice a year, we look at opportunities where we can get the pricing outcome be more strategic. So it's just the evolution of the reassessment of opportunities across the different regions, James. But it's still very pleasing, and we're still seeing that sort of strong pricing outcomes and particularly, in the second half, and into the first half.
James Brennan-Chong, UBS Investment Bank, Research Division - Associate Director and Mining Associate Analyst [68]
Got it. Okay. So if I can just summarize that. So I guess a curtailment of supply probably drove up an additional 200 basis points to the price in the half, but you probably don't think that 12% is going to be a sustainable run rate right now given probably volumes are normalizing. Is that a fair characterization?
Rosaline Ng, Boral Limited - Group President Ventures & CFO
Well, we haven't provided any sort of future guidance on pricing, but I think it's needed to say that pricing over the last few years in fly ash have been very -- has been achieved very well between sort of 8% to 10% INCREASES that we've had in the last couple of years. We don't see anything in the marketplace that remain that it will track from that sort of levels that we've been able to achieve, James.