I'm considering adding to NTR $76. Would appreciate your thoughts on when demand may pick up. Also BHP is going ahead with Jansen. Is it likely to weaken pricing/profitability for NTR?
Thanks, Greg
Demand has slipped with China growth declining, and Europe not exactly booming. But we think as global rates decline (or at least peak) demand should pick up somewhat. We would estimate an improved demand/supply scenario in late 2024, but of course stocks will often anticipate this and move ahead of time. At current prices we think NTR is quite attractive for investors who can withstand some volatility. There is a 3.7% dividend while waiting, and still a possibility of another dividend increase in 2024. On the Jansen project in Sask., it is a large development and will have some impact on supply, certainly. But...stage 1 production is not expected for three years, and stage 2 for at least six years. Delays are also common in such projects. Demand predictions that far out are difficult. Thus, we think NTR investors will focus on the medium term here and since the decision on the project has been out for a while (and stage 1 is about 30% complete) we think the impact is likely already in NTR's valuation.