herbie bel schreef op 12 november 2020 09:07:
bron: Ryan notes
AMG Advanced Metallurgical Group reported that revenues from vanadium in the third quarter fell nearly 13% to $20.7-million compared to $23.7-million in the third quarter of 2019, with FeV prices declines partially offset by sales volume increases.
The average third-quarter FeV price published by American Metal Market was $9.88 per lb, 36% lower than the average price of $15.36 in Q3 2019. AMG noted that the FeV prices referenced had been changed to AMM’s price for 70-80% V, in warehouse Pittsburgh to better reflect AMG’s vanadium grade. AMG, however, produces 50% FeV.
Insiders say that AMG stopped using CRU’s 80% FeV price index years ago because of concerns that it was not being updated consistently.
AMG said that it was on track and on budget to double its FeV capacity by Q4 2021 in Ohio where it is building a second spent catalyst recovery plant.
Company CEO Heinz Schimmelbusch at the start of the conference call with analysts was carefully vague about tipping fees (charged to spent catalyst suppliers) that he had earlier stated would allow AMG Vanadium to be profitable regardless of FeV prices.
Analysts believe Schimmelbusch’s reticence had everything to do with AMG’s quest to prove that vanadium imports threaten US security. In its petition for 232 action against vanadium imports, AMG noted that the domestic vanadium industry was being hurt by imports. However, several companies opposing the 232 action filed comments showing: 1) AMG Vanadium’s profitability; 2) AMG’s ongoing vanadium expansion plans and 3) transcripts of Schimmelbusch talking about steep rises in tipping fees that would ensure AMG’s profitability regardless of spot prices.
When asked on the conference call when the increased recycling fees would become visible in AMG’s EBITDA, Schimmelbusch said that the “shift in fees has happened.” He went on to note that the formulas were complicated and in some cases the upward shift of fees is linked to the vanadium price, which makes it difficult to project when the new recycling fees will have an impact. He ended, “I don’t want to comment further.”
Toward the end of the conference call, however, caution about touting AMG’s vanadium business had disappeared. COO Eric Jackson told the analysts, “I think it is significant that the existing Cambridge system is profitable. No-one else in the world is as profitable.”
Schimmelbusch remarked that for the first time in history, China was a net importer of vanadium in the third quarter. At the same time steel capacity utilization is rising in the US. He said he was not predicting vanadium prices, but statistics indicate that prices have stopped falling and could begin rising.
It is difficult to ascertain specific information about the performance of AMG’s vanadium business from its quarterly reports because vanadium is one of nine materials combined under AMG Critical Materials including aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal.
Even so, AMG did reference vanadium several times in reporting third-quarter results for AMG Critical Materials.
AMG Critical Materials’ revenue in the third quarter decreased 29% to 117.7-million compared to $165.2-million in Q3 2109, “driven largely by lower average prices across six of the seven business units during the quarter, partially offset by higher sales volumes of ferrovanadium, lithium concentrate, tantalum, graphite and silicon.”
Third-quarter gross profit at AMG Critical Materials increased to $8.2 million compared to a loss of $1.3-million in the year-ago quarter. The increase was “primarily driven by a non-cash expense in the prior year related to a vanadium inventory adjustment as a result of lower vanadium prices.”
AMG Metallurgical estimates that its Covid-19 EBITDA impact was $23-million in Q3, based on a bottom-up analysis of business units and a detailed comparison to the company’s financial plan prior to the pandemic. The company’s third-quarter EBITDA fell 42% to $14.1-million compared to $24.4-million in Q3 2019. AMG attributed the decrease to the pandemic and lower volumes and prices compared to the year-ago quarter.
AMG Critical Materials’ pandemic-related impacts continued from the second quarter into the third, but “we saw increased volumes being sold to our customers in four of seven of our business units. Prices continue to be affected by high inventories across global supply chains, particularly in our vanadium and chrome businesses.” the company commented.