Member Info for ragnarlothbrok

Hi RetiredBanker, All I'm saying is that the CEO of Sibanye is worth listening to when he makes price predictions. He was one of the most vocal about palladium's long term prospects, well ahead of the rest of the market, and put up $2bn to acquire Stillwater when the Pd price was a quarter of what it is today.

I think Pt will grow on its on merit (rather than as a substitute for Pd) as its application in the hydrogen economy takes shape. Some really good examples from Heraeus’ latest report below

"The world’s largest PEM electrolyser will start production next year. The industrial gas company, Linde, will operate the 24 MW electrolyser at the Launa Chemical Complex in Germany, producing green hydrogen for its industrial customers. The electrolyser will be built by ITM Linde Electrolysis, a joint venture between Linde and ITM Power, using PEM (polymer electrode membrane) technology which contains platinum (and iridium). Based on current loadings, which at this early stage are generous, a PEM electrolyser of this scale accounts for a few hundred ounces of platinum. Elsewhere in Europe, industry giants Total and Engie have outlined plans to build France’s largest green hydrogen facility with a 40 MW electrolyser to feed Total’s biodiesel plant from 2024. Platinum use in fuel cells, which includes automotive and industrial applications as well as electrolysers, accounted for a few tens of thousands of ounces in 2019 and grew by more than one-third last year. The platinum price has continued to climb, breaking through $1,100/oz but failed to hold above that level. The fundamental outlook has not improved but the price trend still appears to be up.”

https://www.heraeus.com/media/media/hpm/doc_hpm/precious_metal_update/en_6/Appraisal_20210118.pdf

Hey TBTT, I tried to buy some of this ETC a long time ago but I couldn't get any. It must be tiny, or at last it was several years ago. And anyway, you must have 11 bagged SLP by now.

I imagine the volume doesn't exist for a new rhodium ETF. If Anglo had to buy on the market when its ACP went down imagine the pandemonium of a new rhodium ETF trying to build a position. That would be truly sign of a bubble. And even worse for the 400kozpa iridium market.

I just stumbled across this ZAR denominated one. IG markets allows you to buy this with a minimum position size of £172,000 at a margin of 20% - minimum margin required of £35k. A bit rich for me I’m afraid

https://www.bloomberg.com/quote/ETFRHO:SJ

No one knows how much palladium Norilsk is sitting on, but this could be a convenient way to finance it. Its a shame they didn't start a rhodium ETF. I think a minor PGMs ETF would really set a fire under Rh and Ir

https://www.investmentweek.co.uk/news/4025944/russian-firm-mining-company-launch-metal-etcs

Sorry Neal, spelt your name wrong ;-P

This guy has been proved to be a pretty shrewd operator. His call on palladium prices when buying Stillwater Mining means that investment has been paid off well in advance of original expectations. Although I've never heard a CEO say that they weren't in the right market (or that their company was overvalued) his views seem pretty consistent with a lot of other market commentary

https://www.miningweekly.com/article/worlds-biggest-platinum-miner-makes-another-bold-call-on-prices-2021-01-15

Cheers Scoobydoo and 799boy. Hopefully Tharisa brings us all some big returns in 2021!

Looking at the price chart you would immediately assume that rhodium is in a bubble. But like you say TBTT there are solid, supply demand fundamentals underpinning this movement and because the market is so small, with almost no opportunity to speculate, prices are determined almost solely by industrial demand. That's incredibly rare in today's financial system.

When you look at the last big rhodium movement in 2007/08 what drove that spike was the fear of a supply crunch which was popped by the GFC decimating demand. While I don't think we are in supply crunch territory there is no doubt some fears of persistent constraints on production. There is very limited new supply coming on the short term. Now we also have a structurally different demand environment with the emissions standards which run for the next few years. And we have already had our demand shock with the pandemic but the price had recovered within 6 months (and then some).

Even if it is a bubble the SP isn't following it up so you wouldn't expect the SP to tank if it did start falling. SA PGM producers will use this windfall to pay down most of their debts. I would say SA produces 800kozpa of rhodium which would contribute $17bn to the SA economy at current prices.

There was a video on the FT yesterday talking about bubbles in BTC, Tesla and even the S&P500 and I jotted down this quote which I thought was interesting.

"One of the tricky things about asset bubbles is that they can not be conclusively identified while they still exist. Only once a bubble has popped can we be sure that it was ever there at all"

South African chrome ore 40-42% concentrate price is 155-165(bulk), 145-155(container).South African chrome ore 42-44% concentrate price is 185-190(bulk), 175-180(container).

https://www.ferroalloynet.com/chromeore/analysis.html

Are they really? Well fancy that.. I should go and buy some more

THS prill split is (5E PGM, I ignore the tiny bit of gold)

Pt 56%
Pd 16%
Rh 10%
Ru 14%
Ir 4%

On a total basis, the gross revenue share of each metal is:
Pt 12%
Pd 8%
Rh 40%
Ru 1%
Ir 3%
Chrome 36%

On a 3E basis (comparable to SLP) the prill split is

Pt 68.5%
Pd 19.9%
Rh 11.6%

THS produces a little more platinum and a little less palladium and rhodium than SLP

Never too late for a career on the sell side or financial planning... You would have racked up a bit of commission by now

YTD performance

BTC: 32%
Rhodium: 20%
BP: 20%
Tesla: 19%
Oil: 8%
Pt: 4%

I must have skipped through that part ;-)

There is $5m secured loan facility from West Face Capital which has been probably been drawn down. And there are $12m in unsecured (probably very upset) creditors who have been waiting a long time to be paid. Given the cash that has come in Rambler right now is debt free but once the cash is deployed they may end up in a net debt position

TBTT which RNS was that from? I don't see that comment in the recent production report but I agree it doesn't make sense. Specialty chrome grades are mostly used for chemicals and not to produce ferrochrome so don't think the specialty grades have anything to do with China ferrochrome furnaces.

When China phased out its dirty steel production it meant more demand for higher quality iron ore and coal, which China doesn't have. I presume that like most commodities, China has a lot but its low quality, so stricter environmental laws shift the balance to higher quality imports

Hi Sirius, I'm not really sure what your numbers mean but my 2021 FCF forecast (post tax, post capex) for SLP is $100-$110m and $240-250m for Tharisa

We talk about rhodium and PGMs a lot but there have been some interesting movements in the chrome market lately. Chrome ore prices are up over 10% over the last 30 days to around $150/t which is a healthy level for Tharisa. On 1.5m tonnes an extra $10/t gives an extra $15m in revenue per annum, going mostly through to EBITDA.

China port stocks are 3.6m tonnes, which is high, but lower than November which was about 3.8m tonnes. Movements in port stocks are a decent leading medium term indicator for prices. China reported very strong trade data overnight (both exports and imports above expectations) and there are expectations for economic growth of 10% this year, which should flow through into positive stainless steel demand.

However, production is also looking pretty strong. The SA PGM producers must be pumping out the chrome by products with such high PGM prices and Merafe reported its ferrochrome production yesterday, showing a recovery back to pre-pandemic levels. And booming global trade is leading to a shortage of shipping, which is probably increasing transport costs

Hey toptiger, that was the Vision 2020 target, to achieve 200koz run rate in 2020, which would imply 50koz PGM in Q420. That has been delayed and looks like the website hasn't been updated to reflect this. Its possible that should read 2021 but we haven't received any official guidance on when the 50koz/qtr will be hit. Although in the investor meet presentation Phoevus said that the 200koz is definitely still on the table

In the company presentation page 7 there is a chart which shows material moved for Q320 which looks to only have been around 55kt, which roughly equates to the quoted 700tpd (awful!). No wonder they missed the Q3 report! Based on the published grade (which has been improving to 1.7%) and historic recovery, production looks to be less than 1kt of copper for Q3. But if the quarterly targets in green on the chart are met then production will look something like

Q320: 700tpd, 990t copper
Q420: 850tpd, 1,300t copper
Q121: 1,200tpd, 1,800t copper
Q221: 1,400 tpd, 2,200t copper

If they recommence the quarterly reporting (which I'm sure Toby will) then next news is maybe within a month from now. The Q4 results will be bad but they should have some good news on progress into targeted throughput and some steer into the next quarter which may help to derisk the production profile and give investors more confidence that they are on track. It will be Q2 results (sometime in July) which should show the promised 1,400 tpd.

https://www.ramblermines.com/files/rumble-ii-investor-presentation-october-2020-for-rns.pdf

Might be something to do with this

BEIJING, Jan 13 (Reuters)
"Vehicle sales in China, the world’s biggest auto market, rose on an annual basis in December, the ninth straight month of gains, as China continued to lead the global automobile industry’s recovery from the COVID-19 pandemic. Sales reached 2.83 million vehicles in December, up 6.4% from the same month last year, data from the China Association of Automobile Manufacturers (CAAM) showed."