This from our guy K. Quon and from his latest article.
Author’s reply » Mykie,
There are at least 10 clients even in this pre - ramped phase. Demand is not going to be the issue given the size of the markets. In the absolute worst case scenario szym can easily have fuels fill the void. Right now fuels are being addressed regardless in order to establish future markets, but fuels have commodity - like demand. If for whatever reason demand is lagging, it will be very easy to mass produce fuels.
This question of demand is really one that was addressed from 2011 to 2013 imo. People fear the worst when the entire capacity isn’t booked in advance, but it’s important to remember that it works to SZYM’s advantage to have some capacity open to meet changing demand on the fly. That’s an advantage of szym over most producers.
There are at least 10 clients even in this pre - ramped phase. Demand is not going to be the issue given the size of the markets. In the absolute worst case scenario szym can easily have fuels fill the void. Right now fuels are being addressed regardless in order to establish future markets, but fuels have commodity - like demand. If for whatever reason demand is lagging, it will be very easy to mass produce fuels.
This question of demand is really one that was addressed from 2011 to 2013 imo. People fear the worst when the entire capacity isn’t booked in advance, but it’s important to remember that it works to SZYM’s advantage to have some capacity open to meet changing demand on the fly. That’s an advantage of szym over most producers.
I never was worried about the entire capacity being booked but more about will they have enough orders to start getting meaningful revenue once the capacity was on-line. There been a lot of talk about the getting the plants open to have the capacity but now that they are, is there a lot of backlog to utilize it? If they were completely booked to capacity, I would assume that would create another issue; how long to get another plant up and running?
Now if they can always just produce fuel to sell with the unused capacity, I suppose then they can always be fully utilized as long as they can produce fuel cheap enough to sell.