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Chinese airliner manufacturer Comac has received over 1200 orders for its C919 jet (as of Jan23).
It's competitive advantage is the use of Titanium alloy for over 9% of the plane. Stronger and lighter.
Titanium alloys for aircraft around 3.5% to 4.5% Vanadium .
Doing the maths of a 42100kg C919 indicates around 160kg of V per plane.
They are ramping up production to 150 c919 per year so that's 24mtV per year needed if my maths is correct.
Fortune Tweeting that BMN already have "several" electrolyte rental contracts in operation
https://twitter.com/tsepomojapelo/status/1621566913628315648?t=V_UCcuet2hAVhrJVgO0ITw&s=19
Furthermore, Vanchem, which I argue is free in the current mcap, will be equivalent in production scale and costs to Vametco if/when load shedding is curtailed. (The governmental plan is to reduce it to zero over the next 2 years).
At that point Vanchem will be worth more to BMN than Vametco is, as it's 100% owned as opposed to 73%).
I've put more in again today on the basis that if Vametco was a standalone business its valuation would be at least that of BMN now.
BMN mcap is under 60m of which it holds almost 10m in stock (250mtv) that it intends to sell, and an amount of cash that lets say is around 5m.
So the BMN group businesses are valued at around 45m mcap when this cash/Stock is deducted.
Vametco is 73% owned but is a solid 2.7m KgV business at a low cash cost of around $23. It therefore has a gross profit margin of around $20 at current V price for every kgV produced. That's $54m gross profit minus sust capital of say 5m. At 73% of this, minus admin/managerial/taxation etc. Then let's say it has earnings of £20m going forward in 2023.
It's a solid business that's not affected by load shedding and has a new hybrid minigrid about to be deployed that will reduce its power costs.
On its own, a P/E of just over 2, would give it a mcap of BMNs now.
In my mind, BMN investors at the current price are getting Vanchem/Belco/BE/Enerox Cellcube holding for FREE! All of which have significant potential.
Just my reasoning. Feel free to rubbish
Good point. I'm sure we will have interest along these lines as well as from battery manufacturers and the likes of Glencore. Let's hope for a bidding war!
How is Brazil/South America going for existing/planned battery gigafactories?
The focus going forward for manufacturers will be sourcing minerals as locally as possible to reduce supply chains/transportation costs.
SHFE Rebar prices opened up another 2% post the New Year week shutdown.
That's now 3 months of gains since the COVID restrictions were eased in October 22.
https://twitter.com/Sino_Market/status/1619864765563805697?t=Bcjqhb7RWtWL0IqFTsmCBw&s=19
So LME nickel stock at 15yr lows and the nickel price has reverted to normality; rising as stock falls.
Nickel price is touching $30k and the 1st month of 2023 has already gone in A1s build schedule.
If these stock levels persist or decline in the coming months, HZM will be commissioning Araguaia in a price environment that is beyond what they could imagine when they put up the NPV and FCF calculators (max 28k) on their website.
What will be even more incredible is if the nickel price is $30k+ when Vermehlo DFS comes out!
If so, I get the feeling that there will be more than 1 vulture interested at that point.
So Vanadium needed militarily given West now committed to supporting Ukraine with major kit, to lighten aircraft and reduce running costs (huge C919 jets Chinese order - large amounts of Van-titanium alloys required) and Vrfbs going mainstream as we are seeing on a weekly basis.
Plus the annual major Chinese construction period lies ahead from March- recently each year post Chinese New Year the V price has grown by around $15 between Jan and March as rebar suppliers stock up anticipating the summer construction demand.
Rebar prices in China have alraady been growing for months now since the end of COVID restrictions and the rebound in construction continues.
Given all of the above it's not impossible to see a supply crunch on the horizon..
Old article below but all coming to fruition. Especially defence alloy steels (tanks!), vrfbs , aerospace (300+ C919 jets ordered). Well worth a read.
https://www.mining.com/web/vanadium-metal-cant-without-dont-produce/
A dramatic fall to $18k would surely be accompanied by news on Kitco itself and comment on Twitter.
I can't find evidence of either.
Tending to think it's a Kitco glitch, especially when the evidence of stock rundown is gathering new momentum.
Somewhat misleading title to this thread;
"Makwana said permanent load-shedding would form part of Eskom’s plan to increase its Energy Availability Factor (EAF) to a point where it could stop load-shedding within the next 24 months"
LME certainly is erratic and increasingly so as trade volumes have collapsed post the dubious unwinding of LME trades earlier in the year.
Nickel inventory is almost back to a multi year low.
Falling stock does not surprise me in the slightest.
If I was a battery/stainless manufacturer and knew that the deficit in nickel was about to fully materialise from 2024 as long predicted, then I would be buying and stockpiling all I could, whilst scrambling to secure longer term direct supply deals.