Aluminum spikes after US and UK ban Russian metals from exchanges
Base metals seeing sharp gains in Asian trade Monday after US and UK announced aluminum, copper and nickel produced by Russian from April 13th will be banned from trading on LME and CME. Aluminum up 9% for its biggest gain since at least 1987. Both aluminum and copper have rallied to their highest since mid-2022. Sanctions apply to new Russian metal, with old metal still able to be delivered. Decision has sparked debate about longer-term price impact. Bloomberg noted Russia accounts for 6% of global nickel, 5% of aluminum and 4% of copper. However, impact on LME is larger with Russian Nornickel the largest nickel supplier. Russia accounted for 91% of LME aluminum stocks, 62% of copper and 36% of nickel at end of March. Traders suggested sanctions could see Russian metal held outside LME be dumped on exchange amid concerns about prospect of future sanctions. LME itself acknowledging possibility of relatively large supply flooding exchange. Article noted copper, aluminum, and nickel already in historically wide contango, and wave of Russian supply could pull spot prices further below forwards.
For copper I like Ero Copper (ERO) and Solaris Resources (SLS.TO and SLSSF)
Metals Prices
Metals Prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Metals Prices
Additionally, Russia accounts for ~25% of global Palladium supply and ~8% of global Platinum supply (2022 figures). I’m unaware of any great investment vehicles in Platinum nor Palladium but it would appear Russia has significantly sold these in the last year or two to fund the war.
Re: Metals Prices
Regarding investing in platinum, I'm also bullish since the Plat/Gold ratio has fallen so far behind. I also believe that Russia is selling more than it produces to fund the war, which at some point will mean a supply deficit.
Unfortunately there are not many ways to invest in plat. It is basically produced in Russia (uninvestable), South-Africa (almost uninvestable) and Zimbabwe (not my favourite place either).
The safest bet is PPLT, Physical Platinum Shares ETF.
Unfortunately, being based in the EU, I am not allowed to invest in such ETFs that do not fulfil all EU requirements. On the other hand, we can invest in any stupid penny stocks, so I don't really get why we are being so protected from ETF's..
For platinum mining stocks I have found only these:
ANGPY, Anglo American Platinum - biggest market cap
IMPUY, Impala Platinum Holdings - my choice but keeping it small due to the political risks in S-A and Zimb.
SBSW, Sibanye Stillwater - more diversified but feels like they have gone in too many different directions.
Anyway, all of these three are not much above their 52 wk lows and on days when platinum is up, they all can jump 5-10%. Good for trading and maybe keeping a small core position.
I like to have a balance of oil, gas, coal, uranium, gold, silver, copper and a bit of nickel and platinum. Started to nibble on lithium too, maybe still too early, let's see. For the moment everything looks good, unless we get another 2008 type financial crisis..
Unfortunately there are not many ways to invest in plat. It is basically produced in Russia (uninvestable), South-Africa (almost uninvestable) and Zimbabwe (not my favourite place either).
The safest bet is PPLT, Physical Platinum Shares ETF.
Unfortunately, being based in the EU, I am not allowed to invest in such ETFs that do not fulfil all EU requirements. On the other hand, we can invest in any stupid penny stocks, so I don't really get why we are being so protected from ETF's..
For platinum mining stocks I have found only these:
ANGPY, Anglo American Platinum - biggest market cap
IMPUY, Impala Platinum Holdings - my choice but keeping it small due to the political risks in S-A and Zimb.
SBSW, Sibanye Stillwater - more diversified but feels like they have gone in too many different directions.
Anyway, all of these three are not much above their 52 wk lows and on days when platinum is up, they all can jump 5-10%. Good for trading and maybe keeping a small core position.
I like to have a balance of oil, gas, coal, uranium, gold, silver, copper and a bit of nickel and platinum. Started to nibble on lithium too, maybe still too early, let's see. For the moment everything looks good, unless we get another 2008 type financial crisis..
Re: Metals Prices
An excerpt from last Monday’s edition of Haymaker on the topic:
If the world is, as I believe, waking up to the near impossibility of EVs becoming the main source of automotive transportation, the implications might be extremely bullish for what are often called Platinum Group Metals or PGMs. There are six included in this cohort, including rhodium and iridium. But platinum and palladium are the Big Kahunas.
Not least among the biggest drawbacks for EVs becoming the bulk of auto sales is the rapid and dramatic dominance of China when it comes to the batteries and the critical rare-earth metals that are essential to the production process. Almost overnight, that’s become true for the cars themselves, as China is now the largest producer and exporter of EVs. Yet, that is not the only challenge a nearly complete electrification of the West’s auto fleet faces.
Another hurdle is that consumers simply haven’t been that enamored with the EV experience. The litany of drawbacks is well-known so I will only briefly touch on them: range anxiety, plunging resale values, the high expense of battery replacements, the propensity to being totaled for relatively minor damage, faster wear on the tires, and the difficulty of accessing timely and convenient servicing. Even The New York Times ran an Op-Ed on Saturday, April 13th, with the title “Electric Cars Are Boring”.
In fairness, there are meaningful advantages, as well. Those include fewer moving parts; thus, there are fewer things to go wrong. Further, for those who haven’t purchased an EV yet, collapsing prices are alluring. With some 90 Chinese companies producing and exporting them, they are nearly certain to become even more irresistible for those looking for a bargain-priced vehicle.
But will Western nations allow their domestic auto industries to be gutted by this latest Chinese effort to dominate an important market? With prices in free fall, even the U.S. may retaliate with further tariffs, particularly should, as most polls indicate, Donald Trump be back in the Oval Office come January.
Europe’s car industry has long been the bedrock of its manufacturing base. Will the Continent allow the better part of a hundred Chinese EV makers, most of whom are likely losing money, to destroy its nascent carbon-free auto industry by dumping cheap cars on its shores? (Ironically, EVs in China are largely powered off its grid which is — surprise, surprise — mostly coal-fired; hence, EVs over there are anything but environmentally friendly. Frankly, Europe isn’t much better in that regard, excluding France and its mostly nuclear-powered grid.)
My belief is not for long. If I’m right, ICEs might make a surprising comeback. If they do, the same may be true for platinum and, particularly, palladium. Another irony is that catalytic converters are one reason air quality has improved by 75% in the U.S. over the last 50 years. As converters have evolved, platinum is primarily used to capture the most noxious emissions from diesel engines. Palladium, on the other hand, is the key metal employed in converters for gasoline-powered engines.
If the world is, as I believe, waking up to the near impossibility of EVs becoming the main source of automotive transportation, the implications might be extremely bullish for what are often called Platinum Group Metals or PGMs. There are six included in this cohort, including rhodium and iridium. But platinum and palladium are the Big Kahunas.
Not least among the biggest drawbacks for EVs becoming the bulk of auto sales is the rapid and dramatic dominance of China when it comes to the batteries and the critical rare-earth metals that are essential to the production process. Almost overnight, that’s become true for the cars themselves, as China is now the largest producer and exporter of EVs. Yet, that is not the only challenge a nearly complete electrification of the West’s auto fleet faces.
Another hurdle is that consumers simply haven’t been that enamored with the EV experience. The litany of drawbacks is well-known so I will only briefly touch on them: range anxiety, plunging resale values, the high expense of battery replacements, the propensity to being totaled for relatively minor damage, faster wear on the tires, and the difficulty of accessing timely and convenient servicing. Even The New York Times ran an Op-Ed on Saturday, April 13th, with the title “Electric Cars Are Boring”.
In fairness, there are meaningful advantages, as well. Those include fewer moving parts; thus, there are fewer things to go wrong. Further, for those who haven’t purchased an EV yet, collapsing prices are alluring. With some 90 Chinese companies producing and exporting them, they are nearly certain to become even more irresistible for those looking for a bargain-priced vehicle.
But will Western nations allow their domestic auto industries to be gutted by this latest Chinese effort to dominate an important market? With prices in free fall, even the U.S. may retaliate with further tariffs, particularly should, as most polls indicate, Donald Trump be back in the Oval Office come January.
Europe’s car industry has long been the bedrock of its manufacturing base. Will the Continent allow the better part of a hundred Chinese EV makers, most of whom are likely losing money, to destroy its nascent carbon-free auto industry by dumping cheap cars on its shores? (Ironically, EVs in China are largely powered off its grid which is — surprise, surprise — mostly coal-fired; hence, EVs over there are anything but environmentally friendly. Frankly, Europe isn’t much better in that regard, excluding France and its mostly nuclear-powered grid.)
My belief is not for long. If I’m right, ICEs might make a surprising comeback. If they do, the same may be true for platinum and, particularly, palladium. Another irony is that catalytic converters are one reason air quality has improved by 75% in the U.S. over the last 50 years. As converters have evolved, platinum is primarily used to capture the most noxious emissions from diesel engines. Palladium, on the other hand, is the key metal employed in converters for gasoline-powered engines.
Re: Metals Prices
Sprott Physical Platinum Ann Palladium fund available. See Sprott website
Sprott Physical Platinum and Palladium Trust
Sprott Physical Platinum and Palladium Trust
Re: Metals Prices
Thanks guys for your posts. I do believe there is an opportunity here in Platinum and Palladium (look at Palladium 5 year chart).
I will take a look at some of these names. Physical trust seems like the simplest way to play it which be the most appropriate in this more niche sector.
I will take a look at some of these names. Physical trust seems like the simplest way to play it which be the most appropriate in this more niche sector.
Re: Metals Prices
First half of this Korelin Economic report focuses on metals.
https://www.kereport.com/2024/04/20/weekend-show-matt-geiger-dan-steffens-investing-in-gold-silver-oil-and-nat-gas-stocks/
I am interviewed on this show once a month. On this show I highlight Riley Exploration Permian (REPX) and Surge Energy (ZPTAF).
Matt Geiger is a sharp guy that knows a lot about metals.
The CEO of Amex Exploration (AMX.V), a Canadian gold mining company will be joining me on our May 15th webinar.
https://www.kereport.com/2024/04/20/weekend-show-matt-geiger-dan-steffens-investing-in-gold-silver-oil-and-nat-gas-stocks/
I am interviewed on this show once a month. On this show I highlight Riley Exploration Permian (REPX) and Surge Energy (ZPTAF).
Matt Geiger is a sharp guy that knows a lot about metals.
The CEO of Amex Exploration (AMX.V), a Canadian gold mining company will be joining me on our May 15th webinar.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Metals Prices
Tin has been moving nicely as well. Very limited options to play this - Alphamin or Metals X - Alpha has the best mine but in a tough jurisdiction, while MLX has not historically been super shareholder friendly, but has an Aussie based mine. MLX seems to have gotten religion recently, announcing a buyback plan. Its been a good run over the last month or so... and hopefully more to come.