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Molycorp, Inc. Message Board

  • cb_cb480 cb_cb480 Aug 9, 2013 12:58 PM Flag

    MAGNEQUENCH LEADING THE WAY OUT OF INDUSTRY SLOW DOWN ....

     

    In the second quarter our Magnequench business delivered good results as volumes for bonded magnetic powders rose inline with expectations. Forecast by our customers continue to increase and we look forward to the second-half of the year which we expect to be stronger than the first. I'd also like to point out that historically Magnequench has come out of cyclical slow downs before the rest of the Rare-Earth industry.

    Sentiment: Strong Buy

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    • Q2 was slow we all see that ... here was CK's comment:

      "And there was nothing normal about the second quarter. In fact the second quarter was the worst quarter in my experience with the rare earth business at least and since sort of first quarter of 2009 at the depths of the recession.

      So it was, the demand was nowhere near normal levels and pricing kept sliding. So yeah our view is that legacy business should be in the normalized, in a normal environment of demand and pricing, that business should run in that ballpark that you mentioned. But as I said there was nothing normal about the second quarter as far as that business is concerned."

      CK also said this about Magnaquench:

      "still I think Magnequench performance we expect it to be fairly strong given the volume pickup that we’re that we expect to see in the third quarter. The other comment that you’re referring to is that historically given it's fairly commanding market share position in the order of 80%, 85% in this space. We’ve been very careful in running relatively lean supply chains, when we sense that customers are building inventories to take advantage of lower prices and there is a degree of speculation we try to limit that to the extent that we can and as a result because we to some extent we actually have spoiled our customers we have been able to deliver the products they need on very short notices on a regular basis. They tend to run leaner inventories than and perhaps another supply chains. As a result when we go into, when we come out of a slowdown like the slowdown we experience in the recent quarters, Magnequench has come back before the rest of the rare earth industry. So the second quarter performance to us almost seemed like an indicator that the supply chain destocking is abating and the rest of the industry should recover relatively soon."

 
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