Member Info for HENRYKISS

IMO its the rail strike vote
Drax has 72 trainloads a week of wood pellets.
These cant realistically be moved by road
On site storage capacity is 350,000 tons, so they have at most 2 weeks supply on site

Does anyone have any insights into how Drax wood pellet contracts are priced?

I tried to buy this morning on interactive investor and it was unlisted. In the end, I got some on IKBR @ 287

Nice presentation with some industry professionals from a twitter space

https://twitter.com/twebs/status/1478791010436194306?s=20

Positive coverage
https://www.cityam.com/drax-exploring-3bn-expansion-drive-with-north-american-biomass-plants/

Bank Holiday in SA

Yes - the presentation was excellent. The team are managing the portfolio with real skill and determination. The announcement on Coventry looks really good so I've added immediately.

Beijing also wants downstream sales prices to be controlled, though it will let local governments set standards to limit the price of local coal trading, the people said. Coal importers will obtain subsidies to balance their losses.

https://twitter.com/Sino_Market/status/1453279873422827527?s=20

There's plenty of good reasons for July to keep things downbeat in regard to the SA politics.

The country's sole generator is the state owned Eskom. They are under-producing electricity and the way this is managed is by rolling power cuts. This is a very serious political problem.

To Quote Bernard Dalton, executive head of marketing for Thungela Resources. 16/5/21

“Eskom has a number of long-term contracts tied to collieries that are ending soon … it will be forced to pay a higher cost for coal given inflation,” he said. Eskom could be forced back to negotiate as early as this winter in order to meet short-term coal requirements, he said.

So on the domestic front there is huge pressure for Eskom to burn more coal to keep the lights on, but Thungela needs to lift the supply contracts prices.

If I were CEO , I would not want to be celebrating huge windfall profits whilst negotiating contracts with the State generator. I would keep silent about revenue and make negative statements about the failure of the state owned railway and how it was affecting exports. This would be a good political strategy.

I think there is decent value here . Been looking to average up at a good price.

Enviva reported on Friday "Enviva announced the signing of a new 5-year take-or-pay off-take contract to supply British renewable energy company Drax Group PLC ("Drax") with 200,000 metric tons per year ("MTPY") of wood pellets. Deliveries related to the contract are scheduled to commence in 2022. This is the fourth contract signed with Drax since Enviva’s IPO in 2015, and demonstrates the long-standing relationship between Drax, the world’s largest consumer of wood pellets, and Enviva, the world’s largest supplier."

It looks like the RBCT facility is unaffected. The Richards Bay coal terminal facility is owned by Thungela, Exxaro Glencore & others and I am guessing that this is the one Thungela uses. Its on the south side of the harbour. The Transnet owned facility where the fires are taking place is on the northern side of the Harbour.

Hopefully we get an RNS in the morning

Force majeure declared at Port of Richards Bay

Following the massive fire that enveloped the conveyor belt system at the Dry Bulk Terminal in the Port of Richards Bay over the past two days, Transnet has declared force majeure at the port ‘until further notice’.

The blaze started at around 7pm on Wednesday and appeared to have been extinguished only to flare up again at 7.30am before the fight was finally won at 9am.
The Foskor sulphur import conveyor belt was totally destroyed while the Grindrod export coal route was also rendered inoperable.
The Silvacel woodchip route was affected but still able to operate but all conveyor routes have been shut down according to a statement issued by Transnet Port Terminals Richards Bay acting chief executive Jabu Mdaki.

https://zululandobserver.co.za/258647/force-majeure-declared-at-port-of-richards-bay/

“There may be some occasions when we see exports to continental Europe, however this is unlikely to be during peak times and should GB experience some tight/stress periods, we would expect GB prices to escalate and interconnectors to import,”
– National Grid ESO Electricity Winter Outlook

* Structural vulnerabilities in the power market makes security of supply less assured*

National Grid ESO’s Winter Outlook sees a capacity margin of 3.9 GW, or 6.6%, lower than the 4.3 GW or 7.3% it anticipated in it’s early outlook published in July with a loss of load probability of 0.3 hours, up from 0.1 hours in the early outlook. The reasons for the deterioration are changes to the generation mix with slightly lower gas-fired generation and the IFA outage which has removed 1 GW of interconnector capacity since the early outlook.

Unfortunately National Grid ESO has left its nuclear forecasts unchanged, which it explained in the early outlook was based on average availability over the past 3 years. This may be optimistic: as these assets age their reliability is rapidly declining. Right now, EDF has two reactors on planned maintenance, and five on un-planned outages, with seven reactors operating at normal full load. The winter outlook assumes a de-rated capacity of 5.4 GW for nuclear this winter (versus base case installed capacity of 7.1 GW, with a 75% de-rating factor). The reactors currently on un-planned outages have a combined capacity of 3.4 GW representing 2.6 GW of de-rated capacity or two thirds of the capacity margin.

https://watt-logic.com/2021/10/15/security-of-supply-3/

I think they are passively tracking a JSE index. If this is correct, the higher TGA goes, the more they have to hold. Its a huge fund that is obligated to invest most of its funds in South Africa.

thanks - that's helpful!

Does anyone know what the price of wood pellets is doing?

U.K. power prices rose after a coal power plant (Ratcliffe) switched on today to make up for a shortfall in wind generation. Its not really winter yet!

PIC's investment strategy is mostly a passive tracker of the JSE!

Approximately 80% of the listed equities portfolio is managed internally on an enhanced index or ‘passive’ basis, which allows the clients to benefit from the significant saving in management fees, without compromising on performance. External managers manage the remaining 20% of the portfolio, presenting the opportunity to focus on active asset management, to maximise returns for clients.

Our investment mandate prescribes that up to 10% of its AuM can be invested outside of South Africa. Five percent of this is invested in offshore equities and the remainder in the rest of the Africa continent, excluding South Africa.

https://www.pic.gov.za/Pages/listed.aspx#shortpoint-tab-1=shortpoint-gt-1-i-1