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#Palladium Weekly: Long-Term Uptrend Remains Intact – SPONSOR: New Age Metals $ $ $ $ $ $GLEN #PGM

Posted by AGORACOM-JC at 2:55 PM on Monday, April 13th, 2020

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium Weekly: Long-Term Uptrend Remains Intact

  • PALL has rebounded by nearly 50% since it crashed to its lowest since last August at $137.51 on March 16, taking bears by surprise.
  • The rebound in palladium prices has been driven by a broad-based recovery in the precious metals space following the COVID-19 panic last month.
  • Palladium’s outperformance since late March confirms our view that palladium enjoys the relatively tightest fundamental backdrop.
  • Financial flows are absent, with speculators and ETF investors reducing further exposure to palladium. This confirms that there is no bubble in the palladium market for now.
  • For Q2, we see PALL trading between $135 and $285 per share.

Orchid Research


Welcome to Orchid’s Palladium Weekly report, in which we discuss palladium prices through the lenses of the Aberdeen Standard Physical Palladium Shares ETF (PALL).

PALL has rebounded by nearly 50% since it crashed to its lowest since last August at $137.51 on March 16, taking bears by surprise.

The rebound in palladium prices has been driven by a broad-based recovery in the precious metals space following the wave of ugly deleveraging caused by the COVID-19 panic last month.

That said, palladium is the clear winner, which we attribute to its relatively stronger fundamental backdrop. Before COVID-19, the palladium market was expected to register a deficit exceeding 1 million ounces this year. Although the deficit is likely to be much smaller than initially envisaged due to the likely contraction in automotive demand for palladium, the market is forward-looking and therefore, rises on expectations for a large deficit in 2021.

Source: Bloomberg, Orchid Research

Against this, we express the view that the long-term uptrend in PALL remains intact.

For Q2, we see PALL trading between $135 and $285 per share.

Source: Trading View, Orchid Research

About PALL

For investors seeking exposure to the fluctuations of palladium prices, PALL is an interesting investment vehicle because it seeks to track spot palladium prices by physically holding palladium bars, which are located in JPM vaults in London and Zurich. The vaults are inspected twice a year, including once randomly.

The Fund summary is as follows:

PALL seeks to reflect the performance of the price of physical palladium, less the Trust’s expenses.

Its expense ratio is 0.60%. In other words, a long position in PALL of $10,000 held over 12 months would cost the investor $60.

Liquidity conditions are poorer than that for platinum. PALL shows an average daily volume of $3 million and an average spread (over the past two months) of 0.33%.

Speculative positioning

Source: CFTC, Orchid Research

Non-commercials cut marginally by the equivalent of ~19 koz and their net long position in NYMEX palladium in the week to April 7, according to the CFTC. This was the 12th week of decline in palladium’s net spec length over the past 13.

Over March 31-April 7, the NYMEX palladium price tumbled 6.1%. This suggests the presence of additional OTC selling activity.

Non-commercials have slashed by the equivalent of around 1 million oz their net long positions in NYMEX palladium since the start of the year, which represents 15% of annual supply. Yet, the NYMEX palladium price remains up 14% on the year, even outperforming gold (which is up 11% YTD), a clear confirmation of fundamental strength.

Implications for PALL: The absence of speculative participation in the palladium market in spite of 1)the strong uptrend in prices since 2016 and 2)the tight fundamentals of the market makes us even more bullish on PALL. We would turn cautious on PALL once palladium’s spec positioning becomes too bullish.

Investment positioning

Source: Orchid Research

ETF investors sold 4 koz of palladium in the week to April 10, marking a 6th straight week of selling.

In March, ETF investors liquidated 106 koz, representing the largest monthly net outflow since October 2018.

ETF holdings are now below 500 koz, which represents an extremely low level of visible inventories when remembering that the palladium market was supposed to post a 1+ moz deficit this year.

Implications for PALL: The palladium ETF activity has had a muted impact on the NYMEX palladium price because volumes exchanged are impactless on the global palladium market. Low visible inventories are bullish for PALL over the long term.

Seasonal patterns

Source: Bloomberg, Orchid Research

As the chart above shows, the volatility in palladium prices tends to be extreme in March. 2020 did not disappoint in this regard. Lower volatility in the months ahead should be expected based on palladium’s seasonal patterns.

For April, the seasonality is slightly friendly, with palladium prices recording a median performance of +2.7% (over 2002-2019).

Implications for PALL: The high volatility regime is behind us, in our view. The seasonality is positive for the NYMEX palladium price and thus PALL in April.

Closing thoughts

The recent outperformance of palladium over the rest of its complex confirms our view that palladium enjoys the relatively strongest fundamental backdrop.

The absence of financial flows in palladium despite its price uptrend since 2016 leads us to believe that 1)there is no bubble in the palladium market yet and 2)prices are essentially driven by their fundamental dynamics.

The sudden sell-off in PALL in March was exacerbated by the COVID-19 panic. Although palladium’s fundamentals will prove weaker than expected in 2020 due to a likely contraction in automotive demand, the market seems increasingly focused on 2021 when a large deficit is likely to re-emerge as global economic growth bounces back and automotive demand rebounds.

We maintain that PALL is in a clear long-term uptrend and even though volatility cannot be ruled out, we would only turn cautious when investor sentiment reaches an extreme high. We are far from it.

For Q2, we see PALL trading between $135 and $285 per share.


VIDEO – New Age Metals $ 2.9M Ounces Of #Palladium Equivalent Is Why Eric #Sprott Owns 18.5% $ $ $ $ $GLEN #PGM

Posted by AGORACOM-JC at 5:09 PM on Monday, April 6th, 2020

Three years ago, Harry Barr couldn’t get anyone to even look at New Age Metals (NAM:TSXV) flagship property, the 100% owned River Valley Project, one of North America’s largest undeveloped Platinum Group Metals Projects, situated 100 kilometres from Sudbury.  

But with Palladium at $US 2,100/oz and River Valley sitting on 2.9Moz Palladium Equivalent (Measured & Indicated), things have changed significantly, including the fact that  Eric Sprott has become a strategic shareholder with 18.56% ownership.  


NAM’s 2019 Preliminary Economic Assessment highlights include a 14 year mine life, resulting in an annual average payable Palladium Equivalent production of 119,000 ounces.  


The PEA assumed a Palladium price of $US 1,200, which is now 75% higher at $US 2,100.  

With NAM now using their war chest to further drill River Valley and follow-up on recommendations from the PEA, there is reason to believe this story is only going to get better.  

Grab your favourite beverage and watch this interview with NAM CEO, Harry Barr.

Bulls need to overcome 2,350: #Palladium price analysis – SPONSOR: New Age Metals $ $ $ $ $ $GLEN #PGM

Posted by AGORACOM-JC at 1:57 PM on Thursday, April 2nd, 2020

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Bulls need to overcome 2,350: Palladium price analysis

  • Palladium has staged a major recovery after the popular metal received a strong boost from the Federal Reserve’s unlimited bond-buying program
  • Palladium price analysis highlights that a strong recovery from the 1,500 level has occurred

By: Nathan Batchelor

Palladium has staged a major recovery after the popular metal received a strong boost from the Federal Reserve’s unlimited bond-buying programme.

Palladium price analysis shows that the metal needs to overcome the 2,350 resistance level to keep the recent bullish momentum intact.

Palladium medium-term price trend

Palladium recently staged a strong recovery from just below the 1,500 level, after the FED’s QE programme boosted palladium prices.

Palladium price analysis shows that bearish MACD price divergence on the daily time frame has been completely reversed after the latest decline.

The daily time frame also shows that a bearish head-and-shoulders pattern played out to the downside, and reached its overall downside objective.

Drawing a Fibonacci retracement from the all-time price high to the March low, palladium is currently testing the 61.8 retracement of the mentioned sequence. 

The 2,575 resistance level is the next major resistance area to watch if a breakout above the 2,350 level occurs, while failure to surpass the 2,350 level could result in a pullback towards the 50 per cent Fibonacci level, around the 2,180 level.

Saudi vs Russia oil price war

Palladium short-term price trend

Palladium price analysis over the short term shows that the price is consolidating around the metal’s 200-period moving average, around the 2,300 level.

The one-hour time frame is currently showing that a large amount of bearish MACD price divergence has formed during the latest rally.

Looking more closely at the bearish price divergence, the MACD price divergence extends down towards the 1,700 level.

Failure to gain traction above the 2,300 level could result in a drop towards the 1,700 level, which would reverse the bearish MACD divergence.

Palladium technical summary

Palladium price analysis highlights that a strong recovery from the 1,500 level has occurred. The lower time frames are warning that bearish MACD price divergence extends down towards the 1,700 level.


Precious Metal Growth Potential In 2020 – SPONSOR: New Age Metals $ $ $ $ $ $GLEN #Palladium #Platinum #PGM

Posted by AGORACOM-JC at 6:11 PM on Tuesday, March 31st, 2020

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Precious Metal Growth Potential In 2020

By: Tyler Gallagher

Precious metals investors had an excellent 2019, with gold, silver, platinum and palladium seeing sustained growth over a 12-month period. Gold eclipsed the critical resistance barrier of $1,500 per ounce in September. Other metals saw even more impressive growth, but none more than palladium, the most valuable of the four major precious metals. Palladium, a lustrous platinum-group metal, saw a price increase of 59% on the year. Silver experienced a more modest gain of 15.3% over the same period, and platinum boasted a 21.6% year-end gain.

Overall, the 2019 precious metals market was a dream come true for investors.

As CEO of an international alternative assets firm, I’ve helped countless investors diversify their investment portfolios and 401(k)/IRA retirement accounts with precious metals. With the knowledge gathered from over a decade of experience, I’ve put together a list of metals with the best upside potential in the year ahead.

Silver: Modest Upside, Moderate Risk

Silver is perhaps the most unique precious metal. China is by far the world’s largest silver consumer due to its massive industrial economy and manufacturing sector, which utilizes silver in the production of solar panels, electric vehicle parts and more.

However, production slowdowns due to the spread of the novel coronavirus could limit industrial output and cause a decline in global silver demand. Ultimately, I predict that silver will remain a strategic metal with industrial applications that will likely see moderate price increases in 2020. The extent to which it increases will be dependent on the current pandemic and whether Chinese and U.S. leaders successfully negotiate a phase-two trade deal.

Gold: A Blue-Chip Holding

There’s little doubt that gold will perform reasonably well in 2020. I observed gold entering a bull market in 2019 due to increased geopolitical risk, U.S. economic uncertainty, low U.S. bond yields and a repo market scare. Today, many of those growth conditions remain in place.

The yellow metal thrives during times of global economic crises. Since the United Kingdom formally left the European Union (EU) on January 31, and U.S. President Trump’s trade agenda with China remains unclear, there is a high degree of uncertainty in the global economy. If the EU continues to unravel or if another constituent member signals its intention to leave, I expect gold prices to surge. Likewise, if the implementation of the phase-one U.S.-China trade deal is rolled back, we will likely see an uptick in the price of gold.

Other circumstances, such as a rapidly expanding repo market and the potential for further cuts to the federal funds rate, point to strong growth for gold in the year ahead. Debt loads are increasing among both corporations and governments, which also indicate growth potential for gold.

Platinum: A Riskier Investment

Platinum is coming out of an over seven-year bear market that saw its price stagnate amid consistent growth across all other precious metals. Despite being rarer than gold, platinum is used in a range of industrial applications, including in the production of satellite technologies and fuel cells in electric vehicles, as well as in healthcare instruments such as pacemakers.

Three-quarters of the world’s platinum supply is mined in South Africa. However, many of the leading mines in the country have been mired in controversy following human rights scandals and disruption by labor union action. How these controversies and disruptions will play out in 2020 will have an effect on the price of the precious metal.

At best, I expect platinum to see low to moderate growth in 2020. It’s more likely, however, that platinum prices will stagnate given low investment in South African mines.

Investing In Precious Metals In 2020

Overall, I conclude that the precious metals market in 2020 is looking up. The same forces responsible for last year’s jaw-dropping growth remain in place today, and analysts have no reason to suspect these conditions to change in the months ahead. Trade tensions, geopolitical escalation and equity market volatility point toward another year of growth.

This means it’s a good time for entrepreneurs to invest in gold and other high-growth precious metals. During times of great volatility and economic crisis, precious metals can add much-needed diversification to your portfolio so you can safeguard more of your wealth and weather the storm when traditional asset markets suffer and sales decline.

Gold will likely be the safest pick, followed by palladium, with silver a sleeper pick at third. I predict that gold will remain a safe haven store of value during economic and political uncertainty, which makes it a blue-chip investment in 2020 for those looking to achieve diversification and insulate their portfolio against stock and bond market volatility. However, more risk-tolerant investors may consider allocating a minority share of their precious metal allocation to palladium and silver as well.


CLIENT FEATURE: New Age Metals $ River Valley #PGM Project Hosts 2.9Moz #Palladium Equivalent (M&I); #Sprott Owns 18.56% – $ $ $ $ $GLEN

Posted by AGORACOM-JC at 5:48 PM on Friday, March 27th, 2020
  • Palladium Is The Hottest Metal On The Planet
  • River Valley Hosts 2.9Moz Palladium Equivalent (Measured & Indicated)
  • Advancing to Pre-Feasibility Study
  • The Largest Undeveloped PGM Project In North America!
  • Eric Sprott Owns 18.56% Of THIS Palladium Company

River Valley PGM Project near Sudbury, ON

  • Palladium is the main payable metal accounting for 65% of revenue stream based on 2019 PEA.
  • 1:0.4 (Pd:Pt).
  • Excellent infrastructure and within 100 kilometers of the Sudbury Metallurgical Complex.
  • NI 43-101 Mineral Resource Estimation (Q1 2019)
  • PEA done Q3 2019.
  • 2020 plan to follow up on PEA recommendations.

Preliminary Economic Assessment demonstrates positive economics for a large-scale open pit mining operation.

PEA Highlights (CDN$):

  • Life of mine (LOM) of 14 years, with 6 million tonnes annually of potential process plant feed at an average grade of 0.88 g/t Palladium Equivalent (PdEq) and process recovery rate of 80%, resulting in an annual average payable PdEq production of 119,000 ounces.
  • Pre-Production capital requirements: $495 M.
  • Undiscounted cash flow before income and mining taxes of $586M.
  • Undiscounted cash flow after income and mining taxes of $384M.
  • Average unit operating cost of $19.50/tonne over the life-of-mine.
  • Potential for up to 325 jobs at the peak of production.
  • Using March 11, 2020 spot Palladium price (US$2,275/oz) River Valley Project After-tax IRR is 30% and After-tax NPV (5%) is $C858M.

New Age Metals Inc. is an advertising client of AGORA Internet Relations Corp.

New Age Metals $ Commences Drilling at River Valley #PGM #Platinum #Palladium Project Near Sudbury $ $ $ $ $GLEN

Posted by AGORACOM-JC at 8:46 AM on Thursday, March 26th, 2020
  • The River Valley Project is one of North America’s largest undeveloped primary Platinum Group Metal (PGM) projects. The Project has excellent infrastructure and is within 100 kilometres of the Sudbury Metallurgical Complex. The Project is 100% owned by New Age Metals
  • The Company has contracted Jacobs & Samuel Drilling Ltd of Val Caron, Ontario to conduct a phase one 1,600 metre drill program at the River Valley Project and drilling has begun
  • The Company completed a $2M financing on February 3, 2020. The primary use of proceeds will be to follow-up on recommendations from the 2019 Preliminary Economic Assessment (PEA)
  • Eric Sprott became a strategic shareholder and has an 18.56% ownership of the Company’s current issued and outstanding shares on a post-conversion beneficial ownership basis
  • In January, the Company announced that it engaged IBK Capital Corp to assist the Company in evaluating strategic alternatives to maximize shareholder value
  • The Company is actively seeking an option/joint venture partner for its Genesis PGM Project in Alaska and for our Lithium division in Manitoba

March 26th, 2020  – Rockport, Canada – New Age Metals Inc. (TSXV:NAM); (OTC:NMTLF); (FSE:P7J) Harry Barr, Chairman & CEO, stated; “New Age Metals is pleased to announce that the company is about to commence the next phase of drilling at the River Valley PGM deposit near Sudbury, Ontario. The company plans to drill about 1,600m of core in five holes to test high-priority targets within and adjacent to the Pine Zone and Dana North Zone of the River Valley deposit. This drill program is the first phase of our 2020 exploration and development program, and will run through April. The Company continues to monitor the COVID-19 pandemic and is evaluating the potential risks to our staff and contractors. In light of the fluid nature of events the Company would like to note that there is no certainty that the current exploration activities will be completed without interruption.”

The purpose of the drill program is to test three Pine Zone target types: 1) induced polarization (IP) chargeability highs from the 2017 geophysical survey for extensions of the Pine Zone or new discoveries in the footwall to Dana North; 2) potential extensions of higher-grade trends external to the current mineral resources in the Pine Zone; and 3) whether and how the Pine Zone may be connected to the Dana North Zone at depth. The connection of the two zones is currently modelled, based on the available drilling, as a major SSE-plunging fold. The drilling will test for evidence of such folding, including the potential presence of thickened and higher-grade PGM sulphide mineralization within the fold nose. See Figure 1 below for the planned drill hole locations in the upcoming phase one program.

Click Image To View Full Size

Figure 1: Location of planned drill holes (labelled) and previous drill holes plotted on an inverted IP chargeability plan (coloured) and a 3-D wireframe model of the Dana North and Pine Zones, River Valley PGM Project near Sudbury, Ontario

Since the two discovery holes in 2015, 19 more holes have been drilled into the Pine Zone. All the holes except one intersected the zone. Examples of some of the better intersections are: 4.03 g/t Pd+Pt+Au over 9m from 145m in hole 2015-DN002 and 3.22 g/t Pd+Pt+Au over 4m from 202 m in hole 2016-DN-T2-10. More details can be found in the various press releases on the New Age Metals website. The Pine Zone remains open along strike and at depth with an interpreted SSE dip/plunge direction.


Further to news release of March 17, 2020, the Company has issued 271,200 common shares at a deemed price of $0.05 per share to Agora Internet Relations Corp. (“Agoracom”). The securities issued represent the first payment for services under the terms of the agreement and are subject to a four month plus one day hold period expiring July 26, 2020.

About NAM

New Age Metals is a junior mineral exploration and development company focused on the discovery, exploration and development of green metal projects in North America. The Company has two divisions; a Platinum Group Metals division and a Lithium/Rare Element division. The PGM division includes the 100% owned River Valley Project, one of North America’s largest undeveloped Platinum Group Metals Projects, situated 100 kilometres from Sudbury, Ontario as well as the Genesis PGM Project in Alaska. The Lithium division is the largest mineral claim holder in the Winnipeg River Pegmatite Field where the Company is exploring for hard rock lithium and various rare elements such as tantalum and rubidium. Our philosophy is to be a project generator with the objective of optioning our projects with major and junior mining companies through to production. New Age Metals is a junior resource company on the TSX Venture Exchange, trading symbol NAM, OTCQB: NMTLF; FSE: P7J with 136,876,766 shares issued to date.

Investors are invited to visit the New Age Metals website at where they can review the company and its corporate activities. Any questions or comments can be directed to [email protected] or Harry Barr at [email protected] or Cody Hunt at [email protected] or call 613 659 2773.

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Qualified Person

The contents contained herein that relate to Exploration Results or Mineral Resources is based on information compiled, reviewed or prepared by Bill Stone, P.Geo., a consulting geoscientist for New Age Metals. Dr. Stone is the Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical content of this news release.

On behalf of the Board of Directors

Harry Barr”

Harry G. Barr

Chairman and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward Looking Statements: This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results and are based on current expectations or beliefs. For this purpose, statements of historical fact may be deemed to be forward-looking statements. In addition, forward-looking statements include statements in which the Company uses words such as “continue”, “efforts”, “expect”, “believe”, “anticipate”, “confident”, “intend”, “strategy”, “plan”, “will”, “estimate”, “project”, “goal”, “target”, “prospects”, “optimistic” or similar expressions. These statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the Company’s ability and continuation of efforts to timely and completely make available adequate current public information, additional or different regulatory and legal requirements and restrictions that may be imposed, and other factors as may be discussed in the documents filed by the Company on SEDAR (, including the most recent reports that identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Investors should not place undue reliance on forward-looking statements.

#Palladium, #Platinum Soar on S. Africa Lockdown SPONSOR: New Age Metals $ $ $ $ $ $GLEN

Posted by AGORACOM-JC at 11:44 AM on Wednesday, March 25th, 2020

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium, Platinum Soar on S. Africa Lockdown

  • Palladium eyes biggest daily gain since 2001
  • Platinum on track for biggest daily gain since 2008

By Sumita Layek

March 24 (Reuters) – Palladium soared as much as 15% on Tuesday, on track for its biggest daily gain since 2001 as major producer South Africa was locked down due to the coronavirus outbreak, while U.S. gold futures surged over 4% as fresh stimulus stopped a cash hunt among investors. 

Palladium jumped 11% to $1,907.31 per ounce by 11:03 p.m. EDT (1503 GMT), while platinum gained 6.6% to $684.80. 

“The market focus is starting to turn to some of these supply disruptions that the virus brings. South Africa is clearly the main one,” said Saxo Bank analyst Ole Hansen. 

“So, the focus has shifted somewhat from the risk to having a major drop in demand to the equally challenging condition where we’ve supplies struggling to find its way through to the buyer of the metal.”

Platinum prices were set for their biggest daily gain since 2008.

“The country accounts for some 70% of global platinum mined supply and 35% of palladium, with a 21-day lockdown possibly resulting in a 4% and 2% of 2020 supply reduction respectively,” said Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital.

Spot gold was up 3% at $1,599.31 per ounce, while U.S. gold futures climbed 4.2% to $1,633.90.

The price difference between spot gold and U.S. gold futures widened to as much as $65 during the session as a rush of buying met with poor liquidity in the London market.

“The massive Fed stimulus and QE program continues to support gold as it erodes the currency (U.S. dollar). Hard assets are going to be in vogue in that environment,” said David Meger, director of metals trading at High Ridge Futures. 

“The pressure is lifted, we’re no longer seeing the indiscriminate selling, to the contrary, we’re seeing the cream rise to the top.” 

Wall Street jumped at the open on signs that Washington was nearing a deal on a $2 trillion economic rescue package. [MKTS/GLOB] 

The Fed announced unlimited quantitative easing and programmes to support credit markets on Monday. The move triggered a dip in the dollar. 

Also helping bullion, three of the world’s largest gold refineries said they had suspended production in Switzerland for at least a week to curtail the spread of the contagion. 

Meanwhile, U.S. business activity contracted further in March, hitting a record low as the coronavirus pandemic depressed activity in both the manufacturing and services sectors.


#Platinum 2020 ‘Supply Deficit’ on ‘Solid’ #Auto Demand #PGM $ $ $

Posted by AGORACOM-JC at 1:09 PM on Wednesday, November 14th, 2018
  • DEMAND for platinum-group metals from their No.1 use – autocatalysts to reduce harmful engine emissions
  • looks solid for the next 15 years even as sales of electric vehicles grow, the bullion market’s premier industry event was told last month.
Platinum mining supply, in contrast, is set to fall the London Bullion Market Association’s annual conference – held for 2018 in Boston, Massachusetts – also heard.
Speaking on Day 1 of the LBMA Boston 2018 event, Dr.Rahul Mital – technical specialist for diesel after-treatment at US auto giant General Motors (NYSE: GM) – forecast that more than 85% of new passenger cars sold in 2030 “are expected to have internal combustion engines with [catalytic] converters,” because all-electric cars won’t sell as strongly as hybrid vehicles using both technologies.
With environmental regulations growing tighter, hybrid electric vehicles are “typically be certified to lower emission levels,” Mital explained to the LBMA conference, so the quantity of platinum-group metals (PGM) loaded into the catalytic converter for their internal combustion engines “is not expected to decrease.”
Sales of Fuel Cell cars – a competitor green technology to electric vehicles, powered by energy made from mixing hydrogen and oxygen over a platinum catalyst – will meantime grow to perhaps 1 million units worldwide, Mital said.
That would prove enough to make a notable impact on auto-sector platinum demand, he said.
Noting there are “many different forecasts” analysts should consider, Mital said that on his assumptions global PGM usage by the auto sector “is expected to stay stable or decrease [only] marginally by 2030…with diesel sales [needing platinum catalysts] in the heavy-duty industry expected to stay steady with no change or [even a] slight increase in PGM usage as tougher regulations come into play.”
On the supply side meantime, 71% of global platinum-output comes from miners in South Africa, says a note from specialist consultants Metals Focus. So “with 90% of their costs in local currency terms, it is important to view prices in Rand terms,” and with the currency falling hard in 2018 “the Rand-denominated PGM basket price [for platinum, palladium, rhodium and gold] is up 11% for the year.”
That’s now “providing some relief to South African platinum producers,” Metals Focus says. More globally, and on an all-in sustaining costs basis for the first half of 2018, “24% of the industry is loss making, a marked improvement from 57% in H1 ’17.”
South Africa’s output of platinum-group metals rose in September, new data showed last week, beating a 1.8% total drop in all mineral production and a near one-fifth decline in gold output with 7.2% year-on-year growth.
Further ahead however, “Supply driven deficits [are] on the horizon” for platinum worldwide reckons Justin Froneman, chief financial officer for the US at gold and platinum-group miner Sibanye-Stillwater (JSE: SGL), also speaking at the LBMA event in Boston last month.
Since the global financial crisis of 2008 and the following drop in platinum prices, “Capital investment in South Africa has been insufficient to replace current production levels.”
“Without incentive-driven price growth, new supply coming on-stream seems unlikely or delayed,” Froneman went on, forecasting that South Africa’s primary platinum production will drop to 3.9 million ounces in 2025, down more than 25% from the 5.3moz produced in the peak year of 2006.
“The Western Limb [of South Africa’s giant Bushveld mineral complex] currently represents more than 70% of South African supply. No new production is expected from the Western Limb without a real basket price escalation exceeding 20-25%.”
All told, “Platinum is likely to remain in marginal surplus for the remainder of this decade,” Froneman concluded, “before reverting to increasing deficits as primary production from South Africa contracts.”
Platinum’s No.1 industrial use – greater than chemical, electrical, petroleum, medical and all other productive uses combined – autocatalyst demand  may slip 6% this year worldwide, buoyed by growing emerging-market usage but dented by the sharp fall in diesel passenger-vehicle sales seen in Europe since the emissions-test cheating scandal broke at VW and other leading manufacturers.



Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London’s top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian’s views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and in New York; Germany’s Der Stern; Italy’s Il Sole 24 Ore, and many other respected finance publications.


Commodities Roundup: #Palladium Sets Record $ $ $ $ $

Posted by AGORACOM-JC at 3:18 PM on Friday, October 26th, 2018

  • Palladium has been trading at a premium to platinum for the majority of the past year, contrary to the two platinum-group metals’ (PGM) historical relationship.
  • In fact, palladium recently breached the $1,000 per ounce mark for the first time in eight months, and earlier this week hit a record high of $1,150.50 an ounce.

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets.

From price movements to policy decisions, we scour the landscape for what matters. This week:

Palladium Peaks

While other metals have had their ups and down, palladium has been soaring this year.

Palladium has been trading at a premium to platinum for the majority of the past year, contrary to the two platinum-group metals’ (PGM) historical relationship. In fact, palladium recently breached the $1,000 per ounce mark for the first time in eight months, and earlier this week hit a record high of $1,150.50 an ounce.

Palladium is most commonly known for its use in automotive catalytic converters.

The price has surged so much that some analysts have cautioned about a possible correction for the surging PGM.

The DOC calculated countervailing duties as high as 145.37%.

In 2017, the value of imports of the steel propane cylinders reached $89.8 million.


The show’s not over for #platinum as car sector shifts gear $ $ $ $ $

Posted by AGORACOM-JC at 2:49 PM on Monday, October 1st, 2018

  • Our key takeaway from the work we have done on the future of the vehicle industry is that the transition of the industry will be evolutionary rather than revolutionary, says the writer.
  • The SA platinum group metal (PGM) industry has been in a near decade-long downturn as demand shocks and a pessimistic outlook pushed prices to what we believe to be unsustainably low levels.

01 October 2018 – 05:03 Nicholas Hops

Unprofitable supply has been slow to reduce due to high barriers to exit. Sentiment towards the sector is incredibly low due to the labour-intensive, deep-level nature of SA’s industry as well as concerns surrounding the long-term demand for PGMs as the European diesel share declines and the world shifts towards electric vehicles.

The negative sentiment is so great that despite a 36% increase in the industry’s rand revenue basket to near record highs, most equity prices continue to trade at distressed levels. Only Amplats has had a positive return over this period.

PGM comprises five precious metals, of which platinum, palladium and rhodium are the most important. These are referred to as 3E metals. The demand side of the 3E market is dominated by catalytic converters for internal combustion engine (ICE) vehicles, making up 70% of global demand. We are optimistic about the market for the following reasons:

• The outlook for global vehicle sales is good, driven by emerging markets.

• We expect 3E demand to grow over the next decade as environmental legislation in China and the rest of the world forces car makers to use more metal in their vehicles.

• We feel these new legislations are being underestimated. In the next five years, China, the largest vehicle market, will have the strictest emissions standards in the world.

The balance of the market is split between jewellery and industrial catalysts with 9% and 21% respectively. We expect this portion of demand to see slight growth over the next decade. The negativity on the demand side has been driven by the outlook for European diesel sales as well as the rise of battery electric vehicles (BEVs). While the outlook for European diesel is negative, it is important to note that it is only 12% of 3E demand and we do expect this to decline.

We believe in the long-term prospects of BEVs but are cognisant of the challenges facing the technology. Our key takeaway from the work we have done on the future of the vehicle industry is that the transition of the industry will be evolutionary rather than revolutionary.

Importantly, we see a period of mass hybridisation over the next decade before BEVs start to become more affordable for the mass market. We anticipate a shift towards a portfolio of technologies including BEVs, a variety of hybrids as well as fuel cell vehicles. As investors in the PGM sector, our biggest worry is BEV adoption, as these have no PGMs in the vehicle at all. In our forecasts out to 2030, we expect BEVs to make up 19% of global light-duty vehicle sales, up from 1% today. We expect the traditional ICE as we know it to decline from 96% today to 28%.

Currently, petrol vehicles predominantly use palladium in the converter, instead of platinum. Palladium is in material deficit and now trades at a $180/oz premium to platinum, where it historically traded at large discounts. We have gathered that platinum is a superior metal for catalysis and that a growing price differential will swing the original equipment manufacturers back towards platinum in future.

Many look at the platinum surplus and declare the metal is doomed. Our view is, given their fungibility, platinum and palladium must be considered together. Looked at this way, the market is in a growing deficit. Out of the 3E metals, platinum is most important for SA producers as it is makes up 60% of the ounces extracted.

Large reductions

We see 3E demand increasing 11% by 2030, where market rhetoric seems set on declining demand. Beyond 2030, we see large reductions in SA supply as many mines come to the end of their economic lives.

Coupling our supply and demand expectations gives us an average market deficit of 500,000oz, or 2.6% of annual demand each year, over the next 12 years. These deficits are substantially more pronounced in the near term and we expect prices to react strongly over this timeframe. We have excluded potential investment demand from these balances, which may prove conservative.

Negativity towards the industry also stems from the deep-level, high-cost nature of the majority of the SA mines. We have mitigated this through the selection of the highest-quality players in the sector, Northam and Amplats.

Northam is a medium-size producer with two producing mines, run by an entrepreneurial management team that has taken advantage of the downturn in the industry by making smart acquisitions.

Production growth from its Booysendal mine over the next five years will help the group double production. Booysendal is the key asset in Northam’s portfolio, and while it is underground, it is shallow, capital-light and mechanised — meaning a smaller labour component. Northam is well-positioned to generate cash flows and at these metal prices should trade on a nine times price-earnings (9xPE) ratio in the 2019 year.

Amplats is the largest producer of PGMs and has undergone a remarkable portfolio transition in the last five years. Shedding itself of high-cost, deep underground mines and focusing on the key Mogalakwena asset has allowed Amplats to pay the first dividend in the sector since 2013.

Mogalakwena is a unique asset as it is an open pit, which means it comes with less operational complexity and standout margins. It has material expansion capability over the next decade and we believe management will pursue this. Amplats has several options to expand the size of the portfolio over the next decade with high-quality, low-labour ounces. At today’s spot prices, Amplats trades on an 11xPE for the 2019 year.

The sentiment surrounding PGMs has left the sector’s equity prices lagging recent improvements in the basket price. Thanks to their high-quality operations, both Northam and Amplats can generate material cash flows in today’s price environment and we believe equities are yet to reflect this.

• Hops is an equity analyst for Coronation Fund Managers.