The Carbonxt Group Ltd (ASX: CG1) share price reached a fresh new 52-week high today on the back of a positive release from the company.

During afternoon trade, the activated carbon (AC) producer's shares are fetching for 31.5 cents, up 10.53%. At one point, its shares touched a year high of 34 cents, before some profit-taking occurred.

What's driving Carbonxt shares higher?

Investors are buying up Carbonxt shares after the company announced it has secured new powdered activated carbon (PAC) orders.

Worth $5 million annually, this represents close to double of the current value of the PAC orders on hand to $11 million. Carbonxt gained new customers in the power generation, waste-to-energy and cement manufacturing sectors.

The majority of these contracts are expected to commence at the beginning of the new calendar year. Forecast gross margin as a result of the bumper revenue is expected to be about 40%.

Each of the contracts is valid for 12 months, with extension rights to three years providing PAC meets client specification targets.

In addition, two of Carbonxt's existing customers extended their PAC agreements for a further 2 years until 31 December 2023.

The company noted that demand for its products continues to grow as business activity rebounds in the United States. It also said that customers are preferring to sign domestic supply agreements given current global supply chain challenges.

Carbonxt managing director, Warren Murphy commented:

We continue to strengthen our position in the PAC market with these new customer contracts and we have been opportunistic in securing agreements on favourable terms. While annual PAC revenue continues to track up, our focus is on aggressively scaling up new and existing orders for our AC Pellets.

We have a major market advantage here and we are witnessing demand from a number of new sectors that recognise that our technology can cost effectively and successfully reduce emissions and remove harmful toxins from the environment.

About the Carbonxt share price

Over the last 12 months, Carbonxt shares have accelerated by almost 80%, reflecting upbeat investment sentiment. When looking at year-to-date, its shares are further up by around 90%.

Based on today's price, Carbonxt has a market capitalisation of around $54.2 million, and approximately 169.39 million shares on issue.

The post Carbonxt (ASX:CG1) share price rockets 10% following significant purchase orders appeared first on The Motley Fool Australia.

The ASX small-cap company is focused on producing specialised Activated Carbon (AC) products, including Powdered Activated Carbon (PAC) and AC pellets. These are used to help remove toxins and other pollutants created from industrial processes.

Below we take a look at the company's latest sales update.

What update did Carbonxt report?

Carbonxt's share price is soaring today after the company reported it has signed a new US$2 million (AU$2.7 million) contract to supply 1,000 tons of AC Pellets. The pellets will be delivered by the end of December.

The order comes from an existing power station customer in the US state of Wisconsin. Carbonxt will supply the pellets from its Arden Hills facility, located in the neighbouring state of Minnesota. This will see the plant return to full manufacturing capacity.

With the new contract, the Wisconsin power station's total order value has increased from US$3 million to at least US$5 million. The company reports it will realise all the revenue in the current financial year.

Commenting on the new contract, Carbonxt's managing director Warren Murphy said:

This scaled up order from a reliable and long-term customer reflects the steady and progressive revenue growth Carbonxt is now experiencing. To ensure we can reliably deliver the increased tonnage of AC pellets, we have been able to quickly implement new manufacturing processes at Arden Hills that do not compromise product quality or our margins.

With the permit for construction of its plant in the US state of Kentucky pending, and its Arden Hills facility running double shifts, Murphy said, "It is imperative that we commission the planned Kentucky facility in order to capture greater market share and pursue new sector opportunities."

Carbonxt hopes update the market on this "in the very near-term".

Carbonxt share price snapshot

Over the past 12 months the Carbonxt share price remains down 15%, compared to a 22% gain on the All Ordinaries Index (ASX: XAO) over that same time.

With today's intraday gains factored in, Carbonxt's share price has outperformed in 2021, up 22% year-to-date.

The post Why the Carbonxt (ASX:CG1) share price is rocketing 11% higher today appeared first on The Motley Fool Australia.

The Carbonxt Group Ltd (ASX: CG1) share price is right back where it started today. After falling in morning trade then touching an intraday high of 25 cents mid afternoon, the Carbonxt share price has now returned to its opening price of 23 cents.

This comes after the Australia-based company announced a commercial agreement with United States manufacturer, Kentucky Coal Processing.

Carbonxt develops and markets activated carbon (AC) products. These pellets capture mercury and sulphur in a gas or liquid phase from coal fired power station emissions. Used within industrial settings, Carbonxt's products aim to reduce the harmful air pollutants in the environment.

What's the deal?

According to today's release, Carbonxt will expand its manufacturing capacity to produce AC pellets on an industrial scale through the deal with Kentucky Coal Processing.

The company advised that an investment group will construct a specialty AC plant to expand its current capability. It's expected that the facility will be fully operational sometime before the second quarter of FY22.

Carbonxt said the partnership with Kentucky will enable it to purchase the AC pellets at a cost rate basis. Any sales margins that are made will be split between both companies. Carbonxt noted this structure eliminates the need for third-party materials, thereby lowering its overall production costs.

In addition, the company said that while the expansion plans are underway, it will focus efforts on its existing operations at the Arden Hills facility.

Carbonxt revealed that AC pellets sell at around US$2,500 to US$3,500 per tonne, depending on the industrial application and specification. The new plant will have a target of 11,000 tonnes per year, giving potential revenue of US$38.5 million.

The initial term of the agreement is valid for 3 years with options to extended further from both parties. Carbonxt will be responsible for sales and maintaining customer relationships.

Words from the managing director

Carbonxt managing director Warren Murphy welcomed the agreement, saying:

We are delighted to be able to double our capacity and eliminate financial bottlenecks, as well as reducing inventory levels and freeing up further cash that have held back the growth of our industrial pellet business.

This partnership will enable Carbonxt to focus on technology and marketing. The alliance also frees up capacity at the Arden Hills pellet facility and allows that facility to focus on fewer products with higher efficiencies with our current tolling relationship. We look forward to a long and successful relationship.

About the Carbonxt share price

After dropping steeply from its 50 cent peaks in January to hit a 52-week low of 12 cents in March, the Carbonxt share price has been on a mini roller-coaster ride.

At the current share price, Carbonxt has a market capitalisation of around $32 million.

The post What's with the Carbonxt (ASX:CG1) share price today? appeared first on The Motley Fool Australia.