Mark Anthony

Mine Deeper to Understand Platinum and Palladium

True North:

Here is the rhodium price chart:
www.kitco.com/charts/r...

You stated that rhodium is only up 48% ytd. Wrong. It's up from $1000 at the beginning of 2009 to now $1800+. That's 80%+ up ytd.

It would seem a bit surprise at first look. There is no rhodium futures market and virtually no investment interest because it is extremely illiquid to sell. More over rhodium is 90% dependent on auto demand, a weak sector. Why the price goes up?

The price goes up because industry users are HOARDING extra ounces for strategic stockpiling. Any extra ounces you can buy now, regardless of your current need, means you do not have to pay 10 times higher price at $18000 per ounce a few years down the road. So it makes perfect economic sense to hoard. Mean while producers do not need to sell all the rhodium product. They can hoard up waiting for much higher price in the future.

The same principle applies to palladium. I don't think industry users are dumb. They understand palladium can not stay this cheap for long. If they have cash, it makes perfect economical sense to buy extra to safe guard against a future price shock.

This is especially important as now the Russian government palladium stockpile has now depleted. The next palladium price shock is all but ensured to occur imminently once that fact becomes widely known.

Three things to buy in palladium:
1. The physical metal.
2. SWC stock.
3. PAL stock.

seekingalpha.com/autho...

I think I must be the most outspoken palladium advocator on the internet. I devoted a lot of time studying the market. Read my articles at above link.

Safe Haven Investments Amid a Global Crisis

Silver Analyst:

Regarding the platinum price plunge in 1988, I cited the source in my article and even indicated page number (page 103). Go there read the USGS document regarding the event, in third paragraph to the end of page 103:
minerals.usgs.gov/mine...

On page 103: "In December 1988, the platinum market reacted strongly to an announcement by Ford Motor Company that it had
developed a platinum-free automobile catalyst. Spot platinum
prices fell to $100 per ounce on the day of the announcement..."

It says fell to $100, not fell by $100. You could be right, but that was the wording of the USGS document. I may contact them regarding this.

Safe Haven Investments Amid a Global Crisis

The previous link does not work well. Try this:

tinyurl.com/6job9y

Read the news release numbered 08-2914. The fact that US government suspends strategic stockpile platinum sale is extremely unusual, especially in light of multiple aircraft carrier groups are heading to the Persian Gulf.

Remember, platinum is a critical war material.

Safe Haven Investments Amid a Global Crisis

The US Government just announced suspension of sales of six critical strategic defense materials, including platinum. This is a public announcement so I am not revealing any classified information here:

https://dnsc.dla.mil/Uploads/N...

As I discussed, platinum is a very critical war time material.

Safe Haven Investments Amid a Global Crisis

fxtrader07:

For the purpose of SWC. They did NOT go off hedge totally. They replaced it with a better hedge. The new hedge contracts with auto makers guarantees a very good floor price for 100% of the mine production metals should the market price fall, and it has NO ceiling price limitation when the metals go up. In exchange, SWC agrees to sell the metals at a slight discount to current market price should the metals be above the floor price.

I think that is a pretty good deal good for both sides. Auto makers are willing to provide a floor price support because they do NOT want to see SWC go out of business. They lose PGM metals source if SWC goes out of business due to low metal prices. On SWC's point of view, they are protected during bad market times, and now has unlimited profit potential when the PGM metal bull run resumes.

Andrew Ling:

Last when I told you to sell FSLR and walk away, it was above $300, now it's belong. The timing of my original short of FSLR was off but the long term trend is unmistaken that FSLR should sink to the toilet when they finally get their tellurium shortage squeeze. The time is not right yet so I am not in any FSLR short position right now yet. But once I start to see tellurium moving again it's time to start massively short FSLR. Good luck with your casino play. Why do you still stick with FSLR as it hasn't gained anything in 2008?

Platinum, Palladium Set to Skyrocket

MickeyLV:

The auto demand in the US weakening is a myth. Fact of the matter is customers need fuel efficient small cars, and auto makers are not producing enough of the kind of fuel efficient vehicles people want. More over, the booming auto demand in China, Russia, India more than offset the sales drop in the US.
Longer term, there is booming demand of PGM metals in emerging application in alternative energy and in fuel cell. Read this:
stockology.blogspot.co...

Platinum, Palladium Set to Skyrocket

Platinum is very bullish. But palladium will perform much better than platinum in the coming months and years. There has been some unusual events going on in the PGM market. Read them here:
seekingalpha.com/autho...

The best stocks to leverage the PGM bull are PAL and SWC, the only two primary PGM metals producers outside South Africa and Russia.