Delta Technology Shares Higher

Delta Technology Holdings gained 11% in morning trade after it said that the price of solvent, one of its principal byproducts, has quadrupled over the past 12 months. The solvent mainly consists of dichlorotoluene which is used in the production of exterior wall coating and industrial glues.

Mr. Shi, head of sales department, said, “The price of solvent is now around 4500 RMB/Ton. It was only 900-1200 RMB/Ton in Q1-Q3 2016. Solvent is one of the principal byproducts of our chemical manufacturing process. Delta produces between 100 and 300 tons of solvent in OCT/PCT production process every month, and because it’s a byproduct, we don’t attribute a material cost to its production. As a result, sales of solvent not only contribute to revenue growth, but are also highly accretive to margins. In light of this pricing trend, and in conjunction with continued sales growth, we expect the expanding sales trends identified in our January press release to continue and further increase, with expanding margins.”

By Jon Flanagan