Pellet Premiums22 Aug 2020 12:05
Morning,
I have a few questions on FXPO I'd be grateful if anyone could help with please:
1. Does anyone have a good source for historic and up to date Atlantic and China Pellet premium pricing please?
I'm trying to forecast a likely Q3 position and understand better what's driving the SP. There is adverse news flow around pellet premiums and I suspect this goes a long way to offsetting the Iron Ore spot price increases we're seeing. HY report shows 56% YOY fall in Atlantic pellet premiums, I have the average H1 prices but would like something to base a forecast on.
2. Next questions is around capital expenditure. There is very little forecasted in this section of the HY report so I'm expecting <$10m compared to the H1 figure of $96m; a significant bump in FCF.
There are no large debt repayments due so I suspect the majority of the net profit will flow into an increasing cash pile - potentially a bigger dividend depending where the ore and pellet prices are heading. I think this is quite a simple operating model here to forecast, a reliable source for pellet premiums (cannot find on Platts website) would be the main missing component so many thanks if anyone has something they can share.
Best,
Luke