HupSteel
 (10-10-2013, 12:31 PM)NTL Wrote: For projects, will stockists use forward contract pricing to secure a price for steel that will be profitable? They can only do that when the market is in contango. I am not sure about any enduring competitive advantages in the industry that will enable them to profit in any other situation. Of course, when looking at steel prices on futures exchange, steel to be delivered in Chicago or anywhere might not be the same as steel in Singapore. 
10-10-2013, 12:40 PM
Specific to Hupsteel, my suspicion is they don't. The hint comes from the Annual Report. The only hedge they do is on currency.
A stock well bought is half sold - Ben Graham
Price is the most important factor to use in relation to value - Walter Schloss
10-10-2013, 12:55 PM
Welcome NTL, I learnt more from trying to answer the questions.
So how will Hupsteel react to replacement cost issues due to rising steel prices? 2010 AR, hupsteel CEO said the following "Hupsteel will also continue to minimize inventory holding, purchasing only to fulfill secured orders and stock up popular common sized items. In this way, it will be protected against fluctuations in steel prices and avoid over utilizing its cash in inventory purchases. This will allow it to take advantage of attractive offers that might arise from time to time and avoid having to keep stock over a long period of time in view of the uncertainty in market demand."
A stock well bought is half sold - Ben Graham
Price is the most important factor to use in relation to value - Walter Schloss (10-10-2013, 12:55 PM)FatBoi Wrote: Welcome NTL, I learnt more from trying to answer the questions. It's hard to predict their behavior given they don't seem to hedge their commodity price risk. It depends on whether they purchase their inventory at spot or with a pre-agreed forward contract. Same for sales. Of course it's more complicated than that with trade financing and all that. In general, i think JIT models have little inventory risk but also large cash flow risks in the need to repurchase during rising prices.
10-10-2013, 01:45 PM
Safely said,
Low steel price + Low shipping rates = good for end users Rising steel price + Rising shipping rates = bad for end users. Which is now. Will these stockist help their customers to cushion some of the rising costs? Or can simply pass through?
10-10-2013, 02:02 PM
(10-10-2013, 01:45 PM)NTL Wrote: Safely said, Hupsteel would need to extract as much as possible out of their inventory. There is no reason for them to help cushion any of the rising costs for any end user as they need to replenish their inventory to continue operations. Their ability to pass the higher costs on will be determined by how the transactions are structured. Some contracts fix delivery dates but not prices. 
10-10-2013, 06:31 PM
(18-09-2013, 03:41 PM)brattzz Wrote: More share buy backs.. 9 Oct - 250 lots @ 21.86cts
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same! 3) CASH in hand is KING in BEAR! 4) In BULL, SELL-SELL-SELL! 
13-10-2013, 12:57 PM
Hupsteel has the potential to become a super gem, but I am worried about the management as it seems to show that they are unable to make use of their assets well.
I fear that even with the land developments done, they may end up being complacent and the steel business may deteriorate even further. Vested but worried.
Patience is a virtue.
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