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Platinum, and PLA-related shares

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PLATINUM - and PLA-related shares :

 

ETF's : Platinum ETFs ( PPLT -physical, w/ more liquidity : PTM vs. Platinum )
++ VelocityShares 2x Long Platinum ETN (NYSE: LPLT) and VelocityShares 2x Inverse Platinum ETN (NYSE: IPLT) - Trading may have stopped

allow traders to manage platinum exposures using 2x leveraged long and inverse positions linked to the S&P GSCI Platinum Index.
========

 

Platinum is now cheaper than Gold

Gold : 1131.0 per ounce
Plat. : $905.0 (-20%) - there have been times when it was priced ABOVE Gold

michael_0220_1.jpg : pt1825nys.gif

 

pt0060lns.gif : -- : t24_au_en_usoz_6.gif :<-: au1825nys.gif

 

plati.gif?0.3230406799787534 : 24hr-Gold :

 

PPLT (physical etf) vs. GLD ... update : PPLT: All : 5-ys : 1-yr :

Pgu9UMz.gif

 

Costs have been rising (this is through 2012)

 

C1PGMCosts.jpg

 

Compare to Gold Cost

Gold_costs.png

 

=====

Trade Gold & FX in Bitcoins : https://simplefx.com/dashboard/

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Refined platinum production numbers for each company - in troy ounces (oz).

AngloAmPlatinum: 1,890,000 oz : SJ:AMS / JSE:AMS / ANGPY : www.angloamericanplatinum.com
Impala Platinum -- 1,180,000 oz : SJ:IMP / JSE:IMP / IMPUY : www.implats.co.za
Norilsk Nickel ------- 657,000 oz. : MOEX / MNOD - / NILSY : www.nornik.ru
Lonmin plc ---------- 436,000 oz. : Jse:Lon / LMI.L - / LNMIF : https://www.lonmin.com/
Stillwater Mining*--- 285,000 oz. : SWC (on Nyse) :
Northam Platinum--- 241,000 oz. : Jse:NHM / ----- / ---- : www.northam.co.za
=====Top 6 Co's: 4,682,000 oz.
====Top 10 Co's: 5,140,000 oz.
Aquarius Platinum--- 184,150 oz. :
Vale S.A. ------------- 182,000 oz. :
Glencore plc----------- 91,000 oz. :
Asahi Holdings------- 44,800 oz. : a Japanese precious metals recycling company
*reported: South African's Sibanye Gold To Buy Stillwater Mining For $2.2 Billion Or $18 Per Share
+ Platinum Group Metals Ltd.
================
Mine Supply
Total refined production of platinum - including recycled material - was estimated to be 7.225 million ounces in 2014.
This represented a roughly 8 percent decrease from 2013, which was the result of a five-month-long strike by workers at South Africa's three largest platinum mining companies. The strike by 70,000 workers resulted in a loss of over 1 million ounces of platinum and lost revenues of US $2.3 billion. Production by the 10 largest platinum producers accounted for some 5.14 million ounces, or over 70 percent of total global refined platinum production...
The 10 Biggest Platinum Producers 2014 - The Balance
https://www.thebalance.com/the-10-biggest-platinum-producers-2014-2339735
Demand & Balance, 2015

2015 platinum: marginal surplus

A rebound in mine production pushed the platinum market back into a marginal surplus. According to GFMS, global output recovered 27% to 6.16 million ounces, while in South Africa, production was up 40%. The weak rand and and a 23% reduction in costs also augmented the production figures. The net balance for palladium, adjusting for movements of palladium in ETFs, shows a slightly smaller surplus of 265,000 ounces in 2015 compared to 375,000 ounces in 2014.

Scrap jewelry supply was robust, climbing 4% in 2015 to 0.54 million ounces, the highest level since 2011, driven mostly by a 21% surge in Chinese scrap supply. In contrast, in North America and Japan low platinum prices saw recycling volumes slip to near-decade lows.

Autocatalyst scrap declined by 14% in 2015, giving up gains of the last two years to reach 0.93 million ounces says GFMS, particulary North American and Europe, "as lower steel and PGM prices impeded the flow of scrap down the supply chain."

On the demand side, platinum consumption in autocatalysts rose by 2% last year to 3.0 million ounces, with the offroad sector being the primary demand driver at a 24% increase. However platinum used for making jewelry dropped by 4% to 2.46 million ounces, mostly due to lower consumer spending capabilities in China. Industrial segments were also weaker, with the chemicals sector down 17%, the petroleum industry retreating 18%, and platinum demanded by electronics also dropping.

==

>

 

This report asserts that global economic growth should be strong enough to drive demand from roughly 8.1 million ounces of platinum in 2015 to an estimated 8.63 million ounces in 2021, at an estimated CAGR of close to one per cent, driven primarily by increased automotive demand as car manufacturers look to meet ever-tightening emissions targets

> Jan.2016 Forecast: https://www.platinuminvestment.com/files/Platinum_Fundamentals_forecast_Glaux_2016.pdf

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PLG / Platinum Group Metals Ltd.

===

Gold : 1131.0
Plat. : $905.0 (-20%)
PLG- : US$1.46 : raised money at $1.80: US$40 in late Oct., thru BMO bought-deal
Ptm.t : C$1.97
Presentation: http://s1.q4cdn.com/169714374/files/doc_presentations/2016/dec/WaterbergPresentation.pdf

 

CA:PTM /
Platinum Group Metals Ltd. (TOR) ... update :
ptm_zpsddnjmbpc.gif

 

=======

PLG ... update

xx

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Platinum and palladium markets to go into deficit in 2016: GFMS ...

www.mining.com/platinum-palladium-markets-go-deficit-2016-gfms/

May 15, 2016 - GFMS forecasts the platinum market will return to a small deficit in ... But while the supply-demand fundamentals look positive for platinum and ... paving the way for higher prices in 2016, particularly for palladium." ... A rebound in mine production pushed the platinum market back into a marginal surplus.

 

Dissecting how the markets for palladium, platinum and rhodium changed between 2014 and 2015, GFMS says the prices of all three metals fell "on the back of a year unimpeded by industrial action in South Africa and amid a bad year for commodity returns generally." Readers will recall the 5-month strikes at platinum mines in South Africa in 2014. The end of those strikes pushed combined production of platinum, palladium and rhodium by 37%, the highest since 2011.

"The GFMS forecast sees broad support from extremely gradual U.S. monetary tightening, paving the way for higher prices in 2016, particularly for palladium."

 

The price reductions were also exacerbated by: liquidations of ETF positions, with platinum investors reducing their positions by 0.26 million ounces; the Volkswagen scandal, which pushed expected demand for diesel vehicles lower- platinum is a primary ingredient in auto catalysts; and the lower South African rand, which depreciated 26 percent between 2014 and 2015.

 

 

(An older chart, 2012): chart

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BEAR CASE - from 2015 (when the price was : $1,166, now $900 /oz)

 

Plat2016_zpsvy0ftyxl.png

 

Platinum -to Gold : Hit a Low below 75%, Is now about 79%
Plat-toGold_zpsz0lrgpvj.png

 

Platinum, the Bear Story

18 May 2015 by Jim Fickett.

 

There is always a simplified bull story and a simplified bear story circulating for any given asset. I've told platinum's bull story before and will tell it again soon, with updated numbers. But for now the bears are having it their way – platinum is down from a high of $1901 in 2011 to $1166 currently.

The first part of the bear story is that the market for diesel-powered vehicles may be shrinking. For gasoline engines, palladium, which is cheaper, is the primary catalyst; for diesel, only platinum will do. Automobile catalysts for cars and trucks with diesel engines is a major fraction of total platinum demand. Europe, which is the largest market for diesels, has been making noises about discouraging diesel-powered autos and encouraging gasoline power instead. This is, indeed, bad news for platinum demand. However it has been blown out of proportion.

 

According to the World Platinum Investment Council total European autocatalyst demand was, in 2014, about 18% of total platinum demand. 18% is substantial, and there is some real risk. If sentiment against diesel were to gather momentum, and all of Europe were to ban new diesel engines, this would hit the mining industry hard. If, in addition, it were to happen quickly, the blow would be doubled by recycling – old autocatalysts would continue to be scrapped and recycled at the same time that new ones would no longer be in demand (at least for Europe).

 

However there is no evidence at present that things are anywhere near that bad. It is not all of Europe that is currently beginning to discourage diesel, but rather one country, France, and one additional city, London:

  • From Reuters: “Late last year, Paris announced plans to ban diesel cars from the French capital by 2020 to cut air pollution, while London mayor Boris Johnson plans to double charges for diesel cars in congested areas.”
  • And from the Financial Times: “Last year Manuel Valls, the French prime minister, said the promotion of diesel cars had been a “mistake” and Anne Hidalgo, Paris mayor, said she would phase out diesel vehicles from the city by 2020. London has also discussed anti-diesel measures.”

For the near future the effect appears to be quite small. The highly respected commodity analyst team at Macquarie Bank tones down the fears:

The death of diesel engines in European cars has been exaggerated, Macquarie said …

Macquarie said that 53.1 percent of total EU sales were made up of diesel engines in 2013, a figure it expects to fall in 2014 at 52.8 percent.

“For platinum demand this is bearish, but should be kept in context – a 2-percent point decline in diesel share only reduces platinum demand by about 50,000 ounces, and will be offset if overall car sales in Europe rise by more than four percent, which we expect. More profound changes could happen in future,” it added in a report.

… we think [diesel's] market share decline will accelerate in 2015, though by no more than 2.0 percent points,” Macquarie said.

 

So diesel market share surely bears watching in coming years but, for now at least, no significant decline can be predicted with any certainty.

The second part of the bear story is that recycling has increased steadily, with the total percentage of platinum demand met from recycling more than doubling in the last 20 years. Here is a graph from the South Africa Chamber of Mines, based on data from Johnson Matthey:

 

ch-1

pt_supply_by_source_zpsxvbwkfxm.png

 

Jewellery recycling comes and goes, depending on the economic cycle and platinum prices. What is really driving this trend of steadily increasing recycling is autocatalysts. As the general infrastructure for recycling continues to be strengthened, there is no reason why the trend of increasing recycling should not continue.

Again, however, one needs to put things in perspective. One often reads commentary suggesting that, since hulks of discarded automobiles contain a higher percentage of platinum than South African ore bodies, recycling is trivial and will become ubiquitous. However discarded cars and car parts are widely distributed and it is the infrastructure of getting all the used catalysts to a refiner that is the challenge, not the refining itself.

The USGS wrote in 2004:

The relatively low value of the metal content (about $19.00 in each converter), the low concentration of PGM's (less than 0.1 weight percent) and the difficult logistics of returning the material to a central recycling location are reasons why recycling of PGM catalysts in not yet economically viable in the United States.

 

Things have improved since then, but Johnson Matthey reported only 3 years ago that recycling of catalysts was still only at about 50%.

In fact, although the percentage of newly mined platinum in autocatalysts has steadily decreased, the absolute amount of newly mined platinum in autocatalysts has, economic cycles aside, been quite constant for many years. See the green line in the following graph – the gross demand for platinum in new autocatalysts less the amount recovered from recycling old autocatalysts, in millions of ounces:

 

ch-2

pt_mine_auto2015_zpstnvwatvv.png

 

I have also plotted the total amount of platinum produced from mines, in the blue line at the top of the graph. I'm inclined to think the significant dip in the last couple years is temporary. Production dropped strongly in 2014 due to mine strikes and, in the 2015 estimate, the drop is mainly due to decreased demand from investors, the lowest in eight years, unsurprising since very few investors actually buy things when the price is low.

 

It is nevertheless possible that the number of ounces of platinum produced annually by mines might have peaked.

 

What if the absolute amount of platinum needed from mines is now in a downtrend? Compare the blue line at the top of the graph and the red line, recycling, at the bottom. Even in the most pessimistic (for mining) scenarios, it will be a long time before they meet, cross, and mine supply needed goes to zero. So most of the world's platinum need will be filled by newly mined material for a long time yet, and the increase in recycling does not in any way weaken the main bull argument for platinum, which is simply this: mines must turn a profit, and cannot do so at current prices.

==

> http://www.clearonmoney.com/dw/doku.php?id=public:commentary

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PRICE down, and Supply is getting tighter

 

Platinum: Demand Up, Supply Down

Wednesday, 7/13/2016 12:55
Industry's 2016 platinum demand set to keep rising as mine supply falls...
PLATINUM demand has increased and is set to keep on rising compared to last year according to industry analysts, whereas supply is falling.
Total demand for the metal, which finds its single largest use by industry in catalysts to help clean emissions from diesel engines, is set to grow by 2% compared to 2015, while total supply shrinks 3% according to the Platinum and Palladium Focus 2016 from leading precious metals consultancy Metals Focus.
Last year's total supply of platinum was just over 8 million Troy ounces, with total demand reaching 8.2moz, says the report. That marked a 17% and 9% increase respectively from 2014.
Global platinum demand is being driven by strong investment demand, assisted by booming demand in Japan, says a report from consulting analysts and engineers SFA Oxford.
Demand for platinum in the automotive industry is also rising, says Metals Focus, forecasting a 2016 increase of 5% to 3.4moz.
Platinum is essential for catalytic converters used with diesel engines. Tighter regulations on emissions are spreading to off-road vehicles and power generators – trends which will support the increase in demand for platinum according to the analysts.
Automotive industry demand growth in 2015 was led by a 9% rise in vehicle sales in Western Europe, where the imposition of the new Euro 6 legislation also increased platinum loading per car, and 9% growth in India.
Platinum supply, in contrast, is set to fall 3% compared to last year according to Platinum and Palladium Focus, with mine production falling 5% but auto-catalyst recycling increasing by 6%.
Producers in South Africa, the world's top platinum mining nation, are set to face "tough wage talks" reports the Reuters news-wire after their poor balance sheets and low market prices compounded the effects of a five-month strike from 2014.

The Association of Mineworkers and Construction Union plans to demand pay rises of around 50% for the lowest paid workers, says the latest weekly note from strategist Jonathan Butler

==

> More: https://www.bullionvault.com/gold-news/platinum-demand-071320161

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Surplus in 2017?

 

From the Johnson Matthey November 2016 press release
2017 OUTLOOK
whilst primary supplies will be flat at best, there is potential for a rebound in autocatalyst recycling following two consecutive years of price‐related sluggishness. In most industrial sectors, the demand outlook remains firm, but purchases in the autocatalyst industry are likely to dip slightly as lower‐platinum‐loaded catalyst systems are introduced in increasing numbers in European vehicles. As demand in the Chinese jewellery sector seems set on a downward trend, market balance will likely depend on the extent of growth in autocatalyst recycling and the level of physical investment. Unless the latter remains at similar levels to those seen in 2016, we could see the platinum market return to a surplus for the first time since 2011.

==

> https://gold-forum.kitco.com/showthread.php?145060-Platinum-is-Cheap-!!!-Who-s-Buying/page3

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FUTURES and Options

========

 

Platinum, Apr.2017 Futures vs PPLT : 6-mos / / Alone: $909 : PPLT: $86.67 = Ratio: 10.488 / vs.PLM : PTM*-alone : $9.53 = Ratio: 95.4
(PTM had "slippage" over 6-mos; maybe 2-2.5%)

 

Plat-vsPPLT_zpso4qld4kq.gif

 

==== ==== ====

PTM / E-TRACS UBS Long Platinum ETF ... update : 10-d / PPLT-10d :

PTM-12mos_zpswbfurp0w.gif

 

PTM Calls
Strike Jan. 2017 : Feb. 2017 : May 2017 (mid-Pct): TV+ootm (asPct) : Aug17 (mid-as Pct) : TV+ootm (as-Pct)

$8.0 : 1.05-1.80 : 1.05-2.05 : 0.00-0.00, 0.00 (0.00%): 0.00 (0.00%) : 1.30-2.55, 1.93 (20.2%): 0.40 (4.20%) :
$9.0 : 0.25-1.05 : 0.20-1.25 : 0.40-1.30, 0.85 (8.92%): 0.32 (3.36%) : 0.90-1.60, 1.25 (13.1%): 0.72 (7.56%) :
10.0 : 0.05-0.55 : 0.10-0.75 : 0.20-1.05, 0.63 (6.61%): 1.10 (11.5%) : 0.20-1.30, 0.75 (7.87%): 1.22 (12.8%) :

=============
DATE : PTM : May$9Call: Mid-Pt : Pct. : 00tm (asPct) : Aug$9-Call : Mid-Pt : Pct.- : 00tm (asPct) :
12/27 : $9.53 : 0.40-1.30 : $0.85 : 8.92% : 0.32 (3.36%)
12/28 : $9.43 : 0.20-1.55 : $0.88 : 9.33% : 0.45 (4.77%)
12/29 : $9.44 : 0.20-1.55 : $0.88 : 9.33% : 0.44 (4.66%)
12/30 : $9.46 : 0.85-1.60 : $1.23 : 13.0% : 0.77 (8.14%) : $0.70-1.95 : $1.33 : 14.1% : 0.87 (9.20%)


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platinum-gold-ratio.png

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Time to revive the old Platinum thread?

=

HSBC on-line valuations have increased again. Up just over 10% so far this year. On an anecdotal level, there has been a very noticeable uptick in the number of agents bringing buyers to look at units in our estate - perhaps people are finding more value in the secondary market than the primary market?

 

On a side note, I'm still trying to figure out why platinum sells at a discount to gold?

=

PPLT (Platinum) versus GLD (Gold) ... update : w/PTM added : PTM.t :

PPLT-vsGLD_zps86sv7fre.gif

 

Ratio : PPLT -to-GLD

PPLT-toGLD_zpsu0lyk7db.png

 

Ratio: Platinum to Gold

Plat-toGold_zps7d4sm1gn.png

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Platinum Group Metals (PTM.t) - not far from all time lows

 

PTM.t ... update : C$1.57

PTM_zpsx6v5g3qt.gif

 

Apr.2017 Presentation: http://s1.q4cdn.com/169714374/files/doc_presentations/2017/apr/Platinum-Group-Metals-Ltd.-Corporate-Presentation-April-26-2017-FINAL.pdf

News: http://www.platinumgroupmetals.net/investor-relations/presentations/default.aspx

 

Platinum Group Metals Closes US$20.0 Million Bought Deal Financing

04/26/2017

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/26/17 -- Platinum Group Metals Ltd. (TSX:PTM)(NYSE MKT:PLG) ("Platinum Group Metals" or the "Company") announces that further to its press release of April 18, 2017, it has closed its public offering of common shares (the "Offering"). Pursuant to the Offering, the Company has issued 15,390,000 common shares (the "Shares") at a price of US$1.30 per Share, for aggregate gross proceeds of US$20,007,000. BMO Capital Markets acted as the sole underwriter for the Offering.

The net proceeds of the Offering will be used for (i) underground development and production ramp-up of the Maseve Mine; (ii) working capital during start-up; (iii) repayment of the remaining US$2.5 million outstanding amount of a prior advance under the Company's credit agreement with a syndicate of lenders led by Sprott Resource Lending Partnership; and (iv) general corporate purposes.

 

US$1.30 x 1.371 = C$1.78

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I found this thread on goldismoney suggesting that, compared to silver and platinum, gold is getting really expensive: http://www.goldismoney2.com/threads/compared-to-silver-and-platinum-gold-is-getting-really-expensive.143687/

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PPLT / Platinum could be a good buy at about $85 (especially with the USD weakening now)

 

PPLT ,,, update : 5-yrs : 2-yrs : 1yr : 6mo :

PPLT_zpsgxnvsoon.gif

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Nothing particularly new here but its a good summary of expected supply and demand for 2017: https://www.platinuminvestment.com/files/224537/WPIC%20Presentation%20-%20PQ%20Q1%202017.pdf

 

For me the most interesting question is why demand in various categories is, in aggregate, forecast to fall this year?

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