HPA developer Altech tells shareholders to stop stressing about share price weakness
High Purity Alumina (HPA) player Altech Chemicals sought to allay shareholder fears by blaming its deteriorating share price on a general sell down in global equities – particularly in the small cap battery metals space.
And shareholders loved it – sending the stock up over 10 per cent in morning to trade at 9.6c.
Altech (ASX:ATC) made the statement to investors after getting “numerous enquiries” about its weakening share price, which has taken a 40 per cent hit since the start of October — from 14.5c to 8.7c by Thursday close.
Chairman Luke Atkins told investors nothing had changed, as the company continued to make “solid progress” on project development.
“Unfortunately, the company’s share price has been adversely impacted by a recent general sell-down on global equity markets, particularly small-cap battery materials related (lithium, cobalt, graphite and nickel) companies listed on the ASX,” he said.
“The board and I share your frustration of the company’s share price performance, especially considering that we continued to make significant advancements of our HPA project during the months following the successful July 2018 capital raising.
“However, as illustrated by our share price, the company is not immune to general market conditions and sentiment.”
Other HPA focussed explorers on the ASX have not fared much better over this same period.
Pure Alumina (ASX:PUA) – formerly Hill End Gold – is down 35 per cent, from 8c to 5.2c, while FYI Resources (ASX:FYI) is down about 25 per cent, from 8.8c to 7.3c.
But these Australian players will all have huge operating cost advantages over existing producers — in a growing market — if they can get up and running.
The small global HPA market of about 25,000 tonnes annually is tipped to grow to around 48,000 by 2025 and 86,000 by 2030.
The HPA market remains “strong and buoyant”, Mr Atkins said, with demand for HPA from the lithium-ion battery separator sheet sector growing faster than expected.
HPA is used in the separator of a battery to make lithium-ion battery chemistry more stable.
“The price of HPA at the premium end of the market (Japan and South Korea) is holding at US$40,000/t,” he said.
“There is no negative change to the HPA market — if anything, the outlook is more positive than earlier in the year.”