Palladium is the new gold ?

wombat42_2

http://www.etfsecurities.com/msl/etfs_physical_palladium.asp

http://www.theaureport.com/pub/na/7933

http://goldmoney.com/gold-research/russias-palladium-stocks-depleted-by-2011.html

Palladium has been flying in the last 6 months and has gone up about 85% in the last year. There seems to be a perfect storm with world supplies dwindling badly from Russia and South Africa but demand from car manufacture in China etc rocketing. Being in the precious metal complex as with gold, it would also benefit from the reasons gold is going up such as debasement of currencies.

lvader

I agree investing in a mining company would be better, I have some lonmin which is a south african miner that produces platinum and palladium.

wombat42_2

North American Palladium (PAL) and Stillwater Mining (SWC) are the most obvious palladium mining companies to invest in.

sabretoothtigger

Investing in the physical is always more expensive. Precious metals are more compact but they cost more too, I imagine it requires alot of money for it to start making sense because its basically about stockpiling and why should that be profitable

Having mining shares its not that far from lending them your money which is far more useful to them and low cost because the physical aspect isnt there.

Not sure about palladium especially. I'd compare it to silver I guess its got its industrial uses, not sure about jewellery. I dont know if there is a monetary argument like gold or silver
Price of anything is set to go up in theory. Copper has, I think even lead could. Agricultural products even. Related to that I have a small interest in phosphates which are mined also.
I wouldnt try and stockpile any of it as I dont have a spare barn and its too much work to handle and trade and I have the same opinion on the profit of holding the more compact metals


http://en.wikipedia.org/wiki/Rai_stones

demand from car manufacture in China

oil is the more obvious undervalued trade

lvader

I picked Lonmin because they are a ftse company so easier to deal with.

cloud_dog

sabretoothtigger wrote: »

Not sure about palladium especially. I'd compare it to silver I guess its got its industrial uses, not sure about jewellery.

Platinum and palladium are an interchangeable product in the car industry (exhause systems) and can trade opposite one antoher, i.e. if platinum becomes too expensive suppliers will replace with palladium, with the price of the former going down and the price of the latter going up. And so, the cycle will continue when the other gets too pricey.

wombat42_2

cloud_dog wrote: »

Platinum and palladium are an interchangeable product in the car industry (exhause systems) and can trade opposite one antoher, i.e. if platinum becomes too expensive suppliers will replace with palladium, with the price of the former going down and the price of the latter going up. And so, the cycle will continue when the other gets too pricey.

new emission regulations require the use of palladium rather than platinum.
doesnt sound like they are equivalent to me:
http://en.wikipedia.org/wiki/Palladium#Catalysis
http://en.wikipedia.org/wiki/Platinum#Catalysis

cloud_dog

wombat42 wrote: »

new emission regulations require the use of palladium rather than platinum.

Wombat, I don't doubt both palladium and platinum are valuable and scare resources but........

Having quickly searched the net I cannot find anywhere where new emission regulations are mandating palladium. It appears that palladium is more effient at acting as a catalyst (since technology has improved) but, if palladium was 3x the price of platinum I'm sure manufactures would be using platinum.

If there is a directive to use palladium can you please link to it as it would absolutely strengthen the case for palladium.

wombat42_2

ref emission regulations just have a bare statement of that by a commentator but no detail. Anyway another link:

http://seekingalpha.com/article/241228-after-gold-and-silver-how-about-white-cake-for-dessert-part-2?source=yahoo

http://seekingalpha.com/article/240393-why-palladium-could-shine-brightly?source=article_lb_author_1_sc192

wombat42_2

The differentiating factor between palladium and platinum is that palladium is used for gasoline engines and platinum for deisel engines. China is keen on gasoline engines not deisel.

http://www.bloomberg.com/news/2010-11-08/platinum-set-for-its-worst-year-since-2006-as-both-gold-and-palladium-jump.html

"Palladium accounts for 90 to 95 percent of precious metal used in gasoline catalysts and platinum is used for about 75 percent in diesel devices....."

"Palladium is benefitting as state inventories dwindle in Russia, the largest producer, and China favors the metal for catalytic converters in gasoline-powered automobiles."

This may also tie up with emission regulations, presumably gasoline is cleaner than diesel.

sabretoothtigger

presumably gasoline is cleaner than diesel.

I think its whichever does the best mpg. Diesel is best for bigger vehicles and petrol just as good for smaller. Natural gas beats them both easily, but not on calorific content. I have read uranium is the best growth prospect in fuel going forward for china at least



platinum 18% revenue for Anglo american but only 1% profit dec 09 -
I dont especially like the LMI chart but then I thought of cashing in AAL too, but its got a much lower PE ?

Think xstrata looks good
Right or wrong on the lmi chart /price prospects, its riskier because its not diversified and doesnt appear cheap

One thing they all have in common is a similar price to a year ago but its very possible they could all start a second leg up so long as the market prices for each supports it

Nice round up here
http://www.proactiveinvestors.co.uk/market_wraps/23910/mining-news-summary-xstrata-anglo-american-fresnillo-ferrexpo-randgold-resources-23910.html