Member Info for Jager15

Binoculars ? ? ? Personally I think shipping movements are over-rated. The type of cargo (zircon vs ilmenite) and parcel size of shipments is often more important than the number of shipments.

Greeno, ILU shares appeared to get a boost when BSE released their quarterly last week, but have since fallen ~3%. With ILU having already announced an increase in production and management locking in zircon prices for 6 months (a mistake IMO), I think they are fully priced for the moment. The key question for me is whether KMR and other producers follow Iluka's lead and hold Q1 zircon prices flat, or ignore ILU and push for another $50 - 100 increase. The Ruidow article below suggests zircon processors are struggling to pass on the price increases of the producers, yet supply is very tight as we know and is only going to get tighter next year. The Ruidow article may simply be some 'positioning' from the Chinese processors ahead of the next round of price negotiations.

RoP, November is the annual TZMI Mineral Sands Congress in H.K. This is usually the time when negotiations kick off for Q1 / H1 supply, so it will be an important guide to prices next year. Quite a few investors also attend, so a positive sentiment at HK could flow through to the share price.

If RT did put a bid of $2b on the table for KMR, shouldn't shareholders have been told about it ?

I understood only a very small amount of zirconia was used in brake pads, and even then mostly only in higher quality 'ceramic' pads for high performance cars. "NAO brake formulations were designed to replace asbestos brake pads. NAOs employ the use of a matrix of organic and inorganic fillers, friction modifiers, abrasives, and binders. While not considered a fully ceramic material, it is common to have NAOs referred to as �ceramic� due to the practice of using materials like potassium titanate, ceramic fiber wool, silica, zirconia, alumina, silicon carbide, and others as fillers and abrasives. Ceramic pads are quieter, produce little dust, have less rotor wear and offer superior braking performance. However, they are more expensive and are typically used only in premium vehicles or in extreme operating conditions." http://www.ceramicindustry.com/articles/92468-ceramics-that-brake- It doesn't sound like there is much zirconia in the pads of your average Hyundai hatch ? I'd be more worried about the ceramic tile manufacturers reacting to the the price volatility. But I'm sure the Zircon Conference didn't want to talk about the elephant in the room.

Supaman, I like your optimism. However the Mkt cap hit $1.6Bn when ilmenite prices were +US$400/tn and zircon was +US$2,000/tn (give or take double today's levels). Not saying it can't happen again, but within 12months is probably a bit optimistic :).

Skid, it could be worse. ILU has dropped from $9.70 10 days ago to $9.00 despite the positive news about zircon pricing. It seems concerns about the Chinese economy are still impacting resource stocks. We may have to wait for 2018 before we see serious action.

Anecdotally I heard TRO were closer to $1250/tn delivered for Q4. That's the headline price against which larger customers get $40 -50/tn rebates, bringing them back to ~$1,200/tn net. Similarly, ILU have their 'rewards program' which gives Top 20 customers rebates of $30-40/tn, so almost the same net as TRO. Despite the larger increase, RIO is believed to be closer to $1,200/tn before rebates, which reflects the inferior nature of their material for ceramics. Where is KMR ? After achieving an FOB price for Primary Grade below US$ 750/tn in H1, it seems they have a lot of ground to recover in H2. A lot....! Maybe they should follow the lead of the others and have separate Zr and Ti marketing teams ?

I don't think ILU are reducing zircon supply. From their H2 guidance in their half yearly report "Iluka has increased its full year production guidance.....This includes an increase in expected zircon production to 310kt (from 275kt). Sales are expected to be evenly weighted across H1 and H2". After taking a significant write-down for the closure of MB Operations, I expect they'll want to maximise Q4 sales so the new CEO can show a FY profit after last year's huge loss. In any event, sales are likely to be constrained in Q1 due to CNY.

Can't the guys at Ruidow read press releases. What ILU said was "prices would rise US$130 to US$1,230/tn". No one mentioned $1290-1300/tn. (yet !).

BF, you said "Any offer for the company would have been gross of debt, e.g. if ILU offered 17p, 13p of that would have gone to debt and 4p to shareholders; is that really what you wanted?" but I understood ILU's offer was net of debt and shareholders would have received the full 17p (ILU noted in its press releases it had reached agreement for the continuation of the debt facility from a subset of existing Kenmare lenders at lower interest rates).

Skid, I don't think the ILU announcement is a case of "follow me". Rumours are TRO are indicating $150/tn and RIO $180/tn (though no word yet on KMR), so actually its quite a weak decision from ILU given what others have been indicating. Since we're seeing the strongest market conditions in zircon since 2011, it also seems a strange decision for ILU to lock in the price for 6 months and not give themselves the opportunity to lift prices again in Q1,'18. Despite this, we could be looking at $1,400 - 1,500/tn by the end of 2018.