IperionX (NASDAQ: IPX) (ASX: IPX) stock is down 33% as some of the bloom comes off that deal they've got with Ford. Not that the deal has changed, rather views of it seem to have matured. It's one of those things that might, at some point in the future, produce profits. But it's not an immediate game changer perhaps. Well, that could be it - people get over-excited at the first announcement and then prices fade back on further consideration.
We looked at IperionX when the Ford deal was first announced and agreed that they do have something technologically worthwhile. On the grounds that, yes, they do have something technologically worthwhile: “The titanium metals operations are where the interest is. Turning oxide into metal here is the complicated and expensive part of the process. And if you want Ti metal to be able to make powder to then do 3D printing that's what you've got to do. Except - except if you're IperionX, who have a method of taking scrap Ti and turning it into powder which can then be used for 3D printing. That's the unique part of the set up. It avoids all the expense of having to make the metal in the first place - that's $10s per kg of metal often enough.”
It might be worth thinking through the economics for a moment though.
IperionX share price from NASDAQ#
There the message is much more mixed. IPR has released a report giving us more detail here. And the thing that we wanted to see isn't there. For what they don't say is how much cheaper this new powder production method is. Which is, we're really pretty sure about this, one of the things that purchasers would like to see. What we get told is “ In contrast, IperionX titanium is low-carbon with zero scope 1 and 2 emissions. IperionX can uniquely use 100% scrap titanium as feedstock to produce high performance, low-carbon recycled titanium metal via a circular supply chain that doesn't rely upon mined resources.”
We agree that this is unique, as we said last time. But we're not sure how valuable that is. Yes, obviously, all the big companies are at least paying lip service to zero carbon and all that. But we've sold into large companies ourselves - price matters. So while this may be zero carbon if it's not cheaper it's not going to get a big take up.
Yes, true, it uses scrap titanium as the feedstock. But scrap titanium has a price and it's not a low one. All that energy it takes to make Ti metals, well, that's also embedded in the price that has to be paid for scrap.
What we would want to see is IperionX touting how much cheaper their powder is. We're not - so we're a bit disappointed shall we say?
