platinum

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Here’s What Happened

  • MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the globe, cooled off considerably after a sharp rise last month. For October, the sub-index dropped 3.4% to hit 86. That’s nearly back to the August 2017 level.
  • Palladium held steady for a month, but still continues a measurable march upwards. The platinum group metal held above the $900 per ounce level for the second straight month.
  • Platinum did lose a bit of its luster, however, falling back toward the $900 per ounce level and receding from its most recent high of March 2017 (when it landed above $1,000 per ounce). What does that mean? Something quite historic (see the section below)
  • After breaking and holding above the $1,300 per ounce threshold at the beginning of September for the first time since October 2016, the U.S. gold price retraced its steps as well, diving back under that level for the beginning of October.

What’s Going On in the Background?

  • We have quite the record to report. ICYMI, my colleague Fouad Egbaria noted recently that the platinum-palladium relationship reached a milestone: “As of Oct. 1, palladium closed higher than platinum. The last time that happened? Sixteen years ago.”
  • According to a research note from commodities broker SP Angel quoted within a report by Kitco News, “Palladium is benefitting from its inclusion in catalytic converters in gasoline-powered vehicles, which is expecting robust growth from the shift from diesel engines following the 2015 Volkswagen emissions-rigging scandal, and hybrid electric vehicle demand.”

What Metal Buyers Should Look Out For

  • Other analysts have thoughts on platinum/palladium outlook as well. “In the short term, we think platinum is undervalued for a whole host of reasons. Therefore, we think there is scope for platinum to move back to a slight premium in the short to medium term,” Robin Bhar, metals analyst at Societe Generale, was quoted as saying in the Kitco News report. “We don’t see a sustainable premium of palladium over platinum…until about 2020 or 2021.”
  • Overall, however, investors have been seeing nice returns, according to International Banker. The article notes a Reuters poll “of 26 analysts and traders conducted in July, [in which] the average palladium price for 2017 [was] being predicted at $811 per ounce for this year, which is 5 percent above the previous poll conducted in April…[and] the highest annual average price on record, going back three decades.” Well, now we’ve broken $900 per ounce.
  • That makes Standard Chartered rosy as well. “We remain constructive on palladium’s outlook,” according to the bank’s analyst, Suki Cooper. “Not only is the market set to deliver a deficit this year, but it looks set to be undersupplied over the coming years.”

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

  • The U.S. platinum bar price dropped 8.8% to $910 per ounce.
  • The U.S. palladium bar price held pat at $928 per ounce, cooling its heels a bit after three straight months of increases.
  • The MetalMiner IndX gold bullion price in the U.S. dipped 3.1% to $1,279 per ounce. The China gold price also cooled marginally.

The Automotive MMI dropped for the first time since June, falling one point for an October reading of 93.

Much of the automotive basket of metals was stuck in neutral this month, but a few did show some notable movement. U.S. HDG steel dropped 1.7% and LME copper, one of the darlings of August, dropped 4.2%.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Chinese primary lead rose 8.7%. Our Irene Martinez Canorea wrote about environmentally-based smelter shutdowns in China, which supported the lead price.

“The Chinese environmental campaign has heavily impacted lead,” Martinez Canorea wrote. “According to research group Antaike, 80% of illegal secondary smelters have been shut down during the second half of 2017. China has also lost an important source of raw materials from North Korea due to its commitment to international sanctions.”

Palladium Pulls Past Platinum

One tidbit worth noting is the relationship between palladium and platinum. As of Oct. 1, palladium closed higher than platinum.

The last time that happened? Sixteen years ago.

According to a report by Kitco News, however, many analysts don’t expect palladium’s dominance over platinum to last.

The report attributes the price dynamic to a rise in demand in gasoline-powered vehicles and platinum’s fall alongside gold.

“Palladium is benefitting from its inclusion in catalytic converters in gasoline-powered vehicles, which is expecting robust growth from the shift from diesel engines following the 2015 Volkswagen emissions-rigging scandal, and hybrid electric vehicle demand,” according to a research note from commodities broker SP Angel quoted by Kitco.

Dr. Copper Loses Ground

After surging throughout the summer and hitting three-year highs, copper has been backsliding of late.

As of Oct. 1, LME copper dropped from the previous month’s closing price by 4.2%. The metal, often cited as a global indicator of economic health, lost steam in September like a number of other base metals, as Martinez Canorea wrote on Tuesday.

After a booming August, copper slowed down in September.

“Copper has retraced and the general downtrend has slowed down this month. However, the CRB commodities index has increased, something we had suggested might happen and something that signals a potential bull run,” Canorea wrote.

U.S. Auto Sales

In U.S. auto sales, light trucks continued to be a popular option for buyers. In the year to date, over 8 million units have been sold in the U.S., which is up 4.4% from the same time frame last year, according to sales data released Tuesday by Autodata Corp.

By month, September 2017 light truck sales hit 967,547 units, up 12.4% from September 2016. Meanwhile, sales of passenger cars dropped 3.3% last month compared with September 2016 and dropped 10.5% in the year to date (compared with the same time frame last year).

In short? Trucks continue to be in.

As for sales by manufacturer, General Motors led the way with 279,176 units sold, which was up 11.8% from its September 2016 sales total. On the year, however, GM’s sales are down 0.8%.

Similarly, Ford had a strong September, with sales jumping 8.9% from September 2016. However, like GM, Ford’s sales are down in the year to date (2.7%).

Reuters reported Tuesday that GM’s shares rose 3.1% and hit a record intraday high, while Ford’s stock rose 2.1%.

It wasn’t a great month for Fiat Chrysler. September sales dropped 9.7% year-over-year. In the year to date, the automaker’s sales are down 7.9%.

A number of other automakers boasted strong September 2017 sales figurers that raced past September 2016 sales.

Toyota (14.9%), Honda (6.8%), Nissan (9.5%), Volkswagen (22.8%) and Mitsubishi (17.2%) all had solid September year-over-year increases. In the year to date, all five of the aforementioned automakers have exceeded sales compared with the same time frame of last year — Volkswagen posted the largest year-to-date jump of that group at 7.8%.

Sales in China

According to the most recently available sales data from the Chinese Association of Automobile Manufacturers (CAAM), August automotive sales in China were up 5.3% year-over-year.

For the first eight months of the year, 17,511,000 units were sold, up 4.3% from the same time frame last year.

Volvo was among the big winners in China in September. Volvo’s September global sales rose 11.2% year-over-year. In China — Volvo’s biggest market — sales rose a whopping 29.8%, according to a company release. From January-September, Volvo’s Chinese sales are up 29.9% compared with the first three quarters of 2016.

Feeling the Electricity

Meanwhile, our Stuart Burns wrote about an announcement that could represent the rise of the electric vehicle (EV) in China, a shift that has massive implications for the automotive world.

China, the largest automotive market in the world, moving toward the EV constitutes a significant development, to say the least.

Burns covered the recent announcement from Beijing outlining the government’s plans to move toward EVs, as the country — and the world — prepares for the phaseout of vehicles powered by fossil fuels. The U.K. and France have made similar announcements this year, setting long-term goals to ban the sales of gas and diesel cars by 2040.

India, too, announced a push toward electrification earlier this year, with an ambitious goal of selling only electric vehicles by 2030.

For now, of course, these are merely government statements — actual implementation of the processes necessary, in both the public and private sectors, to reach these goals is another story entirely.

As for automakers, GM announced Monday its plans to move toward an all-electric fleet.

“General Motors believes in an all-electric future,” said Mark Reuss, General Motors executive vice president of product development, purchasing and supply chain. “Although that future won’t happen overnight, GM is committed to driving increased usage and acceptance of electric vehicles through no-compromise solutions that meet our customers’ needs.”

The automaker plans to introduce two new all-electric vehicles in the next 18 months, according to the GM announcement, and a total of at least 20 new all-electric vehicles by 2023.

Free Sample Report: Our Annual Metal Buying Outlook

Actual Metal Prices and Trends

U.S. HDG steel fell 1.7% to $800/short ton. U.S. platinum bars fell 8.8% to $910/ounce, while palladium bars stood pat at $928/ounce.

LME copper, meanwhile, cooled off after a hot August, dropping 4.2% to $6,530/metric ton.

Chinese primary lead rose 8.7% to $3,237.87/mt.

ronniechua/Adobe Stock

This afternoon in metals news, a former UBS metals trader was indicted for his alleged role in price rigging, NAFTA renegotiation talks could spill into next year and the palladium price topped platinum for the first time since 2001.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Ex-UBS Metals Trader Indicted for Alleged Price Rigging

A former UBS Group AG metals trader was indicted for alleged price rigging, Reuters reported.

Andre Flotron was accused of placing so-called “spoof” trades from July 2008 to November 2013, in which he allegedly placed orders for metals futures contracts that he intended to cancel before they could be executed, according to Reuters.

Flotron was arrested two weeks ago in New Jersey and released on $4 million bond, according to court documents, Reuters reported.

NAFTA Talks Could Drag on Past December Deadline

The third round of talks focusing on the renegotiation of the North American Free Trade Agreement  (NAFTA) concluded Wednesday in Ottawa. Renegotiating the deal — or withdrawing entirely if a deal can’t be reached — has been a stated goal of the Trump administration. As such, the talks have progressed on an accelerated timeline, with a December deadline in place to avoid elections next year in Mexico, the U.S. and Canada.

Even so, the negotiations might continue on into next year, according to Mexican Economy Minister Ildefonso Guajardo, Reuters reported.

“We have the ambition, we have the strength to try to move forward with a view to closing a negotiation but no one can assure with total certainty that we will be able to do it,” Guajardo told reporters.

“That is our expectation and, therefore, it must also be considered that in this process dates will have to be considered, if necessary, for the start of the next year.”

Palladium Tops Platinum For the First Time in 16 Years

Palladium prices have topped platinum prices for the first time since 2001, according to Kitco News.

According to the report, as of 10:14 a.m. EDT Thursday, spot palladium was trading at $927.30 an ounce, while platinum was down to $918.70 an ounce.

Palladium’s higher price might not last, though, according to analysts cited by Kitco.

Free Download: The September 2017 MMI Report

“In the short term, we think platinum is undervalued for a whole host of reasons. Therefore, we think there is scope for platinum to move back to a slight premium in the short to medium term,” said Robin Bhar, metals analyst at Societe Generale. “We don’t see a sustainable premium of palladium over platinum…until about 2020 or 2021.”

gui yong nian/Adobe Stock

This morning in metals news, the wait for Section 232 continues, investors are betting on copper as electric cars grow in popularity and palladium is having a record year.

Participate in MetalMiner’s Budgeting Workshop on July 26 to help set your 2018 metals budget

Section 232 Watch Drags On

These days, folks in the aluminum and steel industries are looking for any sliver of information regarding what the Trump administration will do with its Section 232 investigations.

Many expected the steel investigation results to be announced by the end of June, but that never happened. Regardless, on Wednesday President Trump told a reporter that tariffs on steel imports “could happen.”

Not exactly the most illuminating quote, but it’s something. Given Trump’s economic rhetoric, both as a candidate and as president, the likelihood of some form of protective measures being instituted seems fairly high.

Copper and Cars

As automotive companies, from Tesla to traditional automotive industry stalwarts, compete to develop next-generation vehicles, investors are betting on copper, according to a report in the Financial Times.

How much more copper will be needed to back the next wave of automotive production?

Estimates vary, but one thing is certain: copper will play a very big role and, as such, demand for it will be high.

Big Year for Palladium

It’s been an up-and-down year for some metals in 2017 — but not palladium.

In fact, palladium is expected to hit its highest annual average price on record this year, Reuters reports. Even more, platinum has outperformed platinum in a big way.

But the question is: Can it last?

“We remain constructive on palladium’s outlook,” Standard Chartered analyst Suki Cooper told Reuters. “Not only is the market set to deliver a deficit this year, but it looks set to be undersupplied over the coming years.”

Free Download: The July 2017 MMI Report

While it’s easy to look askance at something that shoots up in price so quickly, there are indications that palladium will continue to be a strong player in the market.

concept w/Adobe Stock

Reports of platinum’s demise have been much exaggerated — or so this month’s report from the World Platinum Investment Council (WPIC) would argue.

Sales of diesel vehicles in some parts of Europe have taken a beating in recent months over concerns that authorities will raise costs or otherwise make living with diesel engines a less attractive proposition for owners, due to negative sentiment post-Dieselgate. Total car sales have dropped in some European markets, including the U.K.. However, where sales have held up there’s been a definite swing to gasoline vehicles rather than diesel.

The markets have read this trend as meaning platinum demand will fall — but maybe not surprisingly, the WPIC is taking a more optimistic view.

Regardless of buyers’ short-term preferences, the WPIC says the auto industry has an overarching challenge in the years ahead that will support platinum demand. Automakers will face fines if they do not meet new EU CO2 targets by 2020, but the report lists the industry’s rather limited options.

First, the industry could boost sales of battery electric vehicles (BEV). However, with a consensus expectation of BEVs taking no more than 5% of the market by 2025 due to lack of charging infrastructure, it seems unlikely BEVs are the short-term solution.

Source: World Platinum Investment Council

Second, the industry could sell a higher percentage of hybrids. Recent trends, however, suggest demand for hybrids, despite Volkswagen’s Dieselgate, is still growing too slowly. Demand is certainly not growing fast enough to reach those emissions targets, which are just 2 ½ years away.

So, the third option — and to be fair to the WPIC, probably the most likely option — is for automakers to clean up diesel. The technology already exists to meet the most stringent nitrogen oxide (NOx) targets set for 2022, but the industry needs to do more than it has done in the past to prove to the buying public the performance figures they publish can be achieved in the real world.

The WPIC points to French automaker PSA, which has undertaken to publish independently certified, real-world CO2 test results for its vehicles. PSA also recently announced it will do the same for NOx results.

It is only by automakers voluntarily — or maybe by legislation — being forced to accept third-party verification of their emission figures that they will be able to rebuild consumer trust and deflect harsher government legislation on diesel engines in the future.

Not surprisingly, the attraction of the WPIC is significantly cleaner diesel engines will require increased platinum-group metal (PGM) loadings, even as the industry shifts from the current lean NOFX trap (LNT) system to the more effective selective catalytic reduction (SCR) technology. According to ExtremeTech, when announcing Ford’s switch to SCR, it reported that SCR is more costly, but it’s also generally considered more effective than LNT.

Of course, the platinum price has more drivers than just the demand for the catalysts in the automotive market. Investor demand in the form of ETFs, physical demands in the form of jewelry, and chemical and catalyst demand from the chemicals industry are all significant drivers on the demand side.

But much of recent negative sentiment toward platinum has been due to controversy over the diesel engine’s ability to meet emission targets.

And in that sense, platinum’s fortunes will in part ride on the coattails of the auto industry’s ability to re-establish the diesel engine as an environmentally acceptable propulsion unit.

Here’s What Happened

  • All quiet on the precious-metals front this month, as our Global Precious Metals MMI stood pat from May to June at a reading of 84.
  • Since we tend to keep a closer eye on the platinum group metals (PGMs) due to their automotive applications, the U.S. platinum price tracked by the MetalMiner IndX posted only a negligible gain, while the U.S. palladium price suffered only a negligible loss … reflected directly in the wash that was the sub-index’s June performance.
  • Interestingly, gold has been getting hot as of late. More on that below.

What’s Going On in the Background?

  • Although the Global Precious Metals MMI did not reflect it in the May-to-June time period, the U.S. gold price increase after June 1 has turned some heads. As my colleague and new MetalMiner Editor Fouad Egbaria reported earlier this week, “gold neared its year-to-date high on Tuesday,” according to Reuters. “The rise comes in a climate of political uncertainty, with an election in the United Kingdom, former FBI Director James Comey’s testimony before the Senate Intelligence Committee on Thursday and a European Central Bank meeting this week,” Egbaria noted.
  • Back to platinum. As a reflection of the metal’s dawdling short-term pricing, South African producer Lonmin has been struggling. Reuters reported earlier this week that the company is “pulling every lever to try to restore confidence in its ailing business, including reopening a major shaft and expanding its biggest operation,” according to Lonmin’s CEO. Low prices and skyrocketing costs have reportedly conspired to present the company with a cash problem over the past near-decade.

What Metal Buyers Should Look Out For

  • Platinum specifically has had a low-price problem this year — but that’s obviously less of a problem if you’re purchasing metal. While we’re unsure of when prices will swing back up — mainly because output cuts in South Africa and elsewhere have seemingly not helped — it may be hard to discount current windows for smaller spot buys.

Exact Prices of the Key Movers and Shakers

  • Again, the dog days of summer have seemingly started early for the precious metals tracked by our sub-index. Gold, silver, platinum and palladium prices only marginally ticking up, down or remaining flat.
  • The U.S. palladium price dropped 1.3% to $816 per ounce.
  • Meanwhile, U.S. platinum ticked up only $3 to end up at $947 per ounce.
  • Our Indian silver price ticked down 0.5%, settling at $619.15 per kilogram.

Our monthly Global Precious Metals MMI dipped down a point in April from last month, losing 1.2% to end up at 83.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Ultimately, most gold, silver, platinum and palladium price points from the U.S., China, Japan and India dropped off for the month, which led to the sub-index’s overall decline — but there was one price point that decided to blaze its own trail upward.

The U.S. palladium bar price rose 3.4% over the past month, the third straight month of increases on the MetalMiner IndX. Read more

Late last week, Indian media was rife with reports of Vedanta Resources PLC Chairman Anil Agarwal making a “surprise” bid for about 13% of mining giant Anglo American PLC for $2.4 billion, even as the British newspapers headlined the development as a “raid.” Anglo American owns De Beers, one of the world’s largest diamond exploration and mining companies.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

The move to acquire the shares was made through Agarwal’s personal investment firm Volcan Investments in London.

Here’s the lowdown on Anglo American: The U.K.-headquartered Group, with operations in South Africa, North and South America, Asia and Europe, has revenue of $23 billion, EBITDA (earnings before interest, tax, depreciation and amortization) amount to $6.1 billion, and it has a market value of over $20 billion. In addition to diamonds, Anglo is a global player in platinum and base metals and minerals — it mines copper, nickel, niobium and phosphates. It also sells commodities such as iron ore and manganese, metallurgical coal and thermal coal.

When the 13% shares are acquired, Agarwal’s Volcan will be the second-biggest shareholder after the South African Government investment firm Public Investment Corp., which owns 14%. Volcan, said news reports. Volcan intends to finance the investment through mandatory exchangeable bonds. Led by JPMorgan Chase & Co., the bond sale will take place on or around April 11, the closing date.

Agarwal is the founder of Vedanta but he said he doesn’t intend to make a takeover offer for Anglo American, though a merger between the two failed last year. Incidentally, in 2010, Vedanta acquired Anglo American’s portfolio of zinc assets in Namibia, South Africa and Ireland.

Agarwal told the Sunday Times that he “liked” Anglo’s entire balanced portfolio, both in South Africa and elsewhere.

Some years ago, through his entities, Agarwal had also signed an agreement with the South African government for sharing mining technology.

Two-Month Trial: Metal Buying Outlook

He said he would be “fully supportive of the board, management and strategy”.

Metal trader turned mining tycoon Agarwal started as a scrap dealer way back in 1975, and his has been a rags to riches story so far but we’ll have to wait and see if his interest in Anglo American is more than just that of a minority investor.

The World Platinum Investment Council‘s bullishness on platinum as a key investment and industrial asset, which we reported on last fall in an interview with the Council’s Director of Research Trevor Raymond, seems to be bearing fruit as we approach the end of Q1.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Platinum bar prices and a couple other precious price points led MetalMiner’s Global Precious Metals MMI to rise 2.4% for March 2017, landing at a value of 84.

Global Precious MMIIndeed, the U.S. platinum bar price, up by nearly 3% this month, has been on an upward trajectory for the past three months, starting the month out above the $1,000-per-ounce level for the first time since October 2016.

A Focus on Platinum

Worries over supply shortages of the namesake of platinum group metals (PGMs) are still behind the investment opportunities that the WPIC foresees — so much so that the Council is pushing new initiatives on two separate global fronts. Read more

Well, perhaps these rebounds are not quite worthy of The Worm — but our Global Precious Metals MMI has hit its highest level since October 2016, climbing 7.9% to 82 for the February reading.

PGMs Lead the Way

Two of the biggest movers on MetalMiner’s precious metal sub-index were U.S. prices of platinum and palladium, rising 10.2% and 10.9%, respectively.

That palladium increase nearly got the price to the 18-month December 2016 high.

Click Here for Current Metal Prices

Here’s the deal with palladium in a nutshell, from MoneyWeek:

“Both U.S. and Chinese car sales have been solid of late, with the latter rising at their fastest pace in three years (in 2016) and the former potentially set for another boost thanks to President Trump’s fiscal stimulus. China’s pollution problem is forcing it to tighten car emission standards, adds Chen Lin on Equities.com, which implies a steady rise in demand for palladium over the next few years.

“On the supply side, South Africa, the world’s top supplier, is not expected to increase mined output much. Analysts reckon that dwindling sales from Russia’s stockpiles means they are probably nearly depleted. TD Securities thinks the market deficit could double this year.” Read more

1 2 3 4 5 6 15