Tuesday, February 23, 2021 8:07:25 AM
*AM Metals Roundup* Metals option expiration on the Comex today for the March contracts.
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https://jessescrossroadscafe.blogspot.com/
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METALS-Copper's spectacular rally slows at 9 1/2-year highs
LONDON, Feb 23 (Reuters) - Copper touched a new 9-1/2 year high on Tuesday before easing back as investors consider whether strong demand and tight supplies are enough to extend a breathtaking rally.
Benchmark copper on the London Metal Exchange was up 0.2% at $9,112 a tonne at 1140 GMT, having reached $9,305, the highest since August 2011.
Prices have shot up 16% in February, the biggest monthly rise since November 2016, taking gains since the start of 2020 to around 50%.
Many analysts expect demand from the power and construction industries to overwhelm supply, potentially pushing prices into record territory above $10,190 a tonne.
Copper may need to pause in the short term, but the outlook is bullish, said independent analyst Robin Bhar. “I would expect corrections to be pretty short lived,” he said.
DEFICIT: The roughly 24 million tonne a year refined copper market is already in deficit and was undersupplied by 589,000 tonnes in the first 11 months of 2020, the International Copper Study Group (ICSG) said.
POSITIONING: Speculators have piled into the market with net longs in LME copper at 54% of open contracts and in Shanghai Futures Exchange (ShFE)copper at 39% of open contracts by the end of last week, brokers Marex Spectron said.
Shanghai Dalu Futures, a brokerage, amassed a $1 billion long position in four days after the Chinese New Year celebrations ended last week, ShFE data shows.
CHINA: Yangshan copper import premiums rose to $75 a tonne, the highest since August, pointing to solid demand in top consumer China. SMM-CUYP-CN
STOCKS/SPREAD: Inventories in LME-registered warehouses are near their lowest since 2005 and traders are paying premiums for quickly deliverable metal. MCUSTX-TOTALCMCU0-3
MARKETS: Global stock markets fell. The dollar strengthened and oil prices rose.
COPPER/NICKEL SUPPLY: Zambian copper output rose 10.8% last year to 882,061 tonnes and Philippine nickel output increased 3% to 333,962 tonnes, according to government data.
PRICES: LME aluminium was down 0.7% at $2,152 a tonne, zinc was 0.5% lower at $2,885, nickel fell 0.8% to $19,335, lead slipped 0.2% to $2,148 and tin was up 0.5% at $26,740.
All are at or near multi-year highs. (Reporting by Peter Hobson. Additional reporting by Mai Nguyen. Editing by Mark Potter)
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All that glitters is not gold
Investors are seeing the longer-term potential of platinum group metals.
22 February 2021 12:39 / By Trent Hodges - Gray Capital
Although gold has been a strong performer over the years, investors are seeing the longer-term potential of platinum group metals (PGMs) which include platinum, ruthenium, rhodium, palladium, osmium, and iridium.
The primary use for these metals is in emissions reduction, particularly in catalytic converters in vehicles. Jewellery is an important source of demand as well, while PGMs are also used in the electrical, medical and forensic industries.
But the real magic lies in the role of these metals in reducing emissions, clearly a global imperative as governments turn up the pressure on climate change and decarbonisation.
Don’t make the mistake of assuming that only platinum is important. For example, the past decade has seen increased demand in palladium as a cheaper alternative to platinum that is still effective in petrol-powered cars. Platinum is the only option for diesel cars, but these have dropped significantly in popularity in the wake of emissions scandals in Europe.
It may come as a surprise to you that South Africa has more than 80% of the world’s platinum reserves and is the largest producer in the world of PGMs.
Due to our critical importance in the global supply chain, our ongoing issues in this country give price support to platinum. Load shedding, any potential labour issues and the general lack of a Covid-19 vaccine has assisted in creating worries over supply, which helps to drive the price higher.
Year-to-date, the platinum price is up nearly 20%. Over 12 months, the increase is 32%. In case you need a reminder of how important market timing can be, the increase over five years is only 39%. In other words, the real price action has been in the past 12 months.
Platinum is primarily an industrial metal, rather than a store of value. It suffered a precipitous drop in March 2020, down 40% from the peak in January 2020. Although South African challenges help the price, there’s minimal demand for platinum when new cars aren’t being built and sold.
For investors who are bullish on this space, one option is to invest directly in platinum itself, although that doesn’t consider the supply-demand dynamics and potential benefits of the other PGMs.
Platinum is currently trading at similar USD price levels to 2006, so it hasn’t been a good investment over the past 15 years or so unless you consider ZAR depreciation. In contrast, gold is trading 4 – 5x higher than it was in the mid-2000s (again in USD).
Tied to the fortunes of the broader economy due to its application in the new vehicle industry, platinum isn’t a hedge in equities portfolios in the same way that gold is. It requires investors to take a more active view on the demand and supply realities, as well as the fundamentals of the leading miners in this space.
Assuming the metal itself isn’t the preferred option for any given investor, the alternative would be to buy a selection of PGM mining houses or to even back a specific stock (obviously the riskiest option of them all with no diversification).
Share price growth in the mining companies is tied closely to metal prices rather than the timing of financial results. This is because analysts can predict earnings with reasonable levels of certainty, based on the rand price of the metal in question and an approximation of the cost of production.
This is the reason why recent blockbuster results from South African mining houses haven’t necessarily caused significant jumps in share prices. The financial results are largely priced-in, based on the average price of the metal during the reporting period which ended in December for many of these miners.
Over 12 months, Impala Platinum (JSE: IMP) is up 41%, Sibanye-Stillwater JSE: SSW is up 38% and Anglo American Platinum (Amplats) JSE: AMS is up 26%. The really incredible story has been Jubilee Metals JSE: JBL , a tailings business that reprocesses PGM and other metals. The company is up 346% in the past 12 months! When you get it right with small caps, the rewards are significant. So are the risks.
Amplats and Impala Platinum are pure-play opportunities in the PGM space. Sibanye-Stillwater is a more diversified play, with platinum operations in the US and South Africa as well as gold operations locally.
Mining giants must constantly balance current prices against future expectations. It takes years to execute a mining project, by which time the forces of supply and demand will probably look different.
This is why mining is a high-risk, high-reward game.
Sibanye-Stillwater is perfect evidence of this. After the Stillwater merger in 2017 which left the company with a massive debt pile, the recent rally in the prices of PGMs helped the company beat the debt trap and post incredible profits of nearly R30bn.
Sibanye-Stillwater acquired Lonmin in 2019 in an all-share offer that valued the PGM business at R4.3bn. This includes the Marikana complex, which is a PGM juggernaut that has a sad history. The Marikana massacre of 2012 will never leave the memories of South Africans and especially the people affected, but the mine today is a jewel in Sibanye’s crown.
Sibanye recently confirmed a further R3.9bn investment into K4 at Lonmin. CEO Neal Froneman is outspoken and critical of the South African government, so this investment would not be approved by the group unless they are feeling confident about the future of PGMs.
Considering this project will take eight years to complete, it’s a strong show of faith in PGMs from one of the most iconic leaders in the industry.
All that glitters is not gold after all.
https://www.moneyweb.co.za/financial-advisor-views/all-that-glitters-is-not-gold/
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Is the paper silver market starting to unravel?
February 22, 2021
The longer you’ve followed silver, the longer you've known that at some point the price was going to have to move higher. And probably by a lot.
At this point, this is by far the most intense I have ever seen the situation in the 12 years I've been following the silver market. And fortunately, for this Sunday's open in the far east, I have an All-Star cast of silver experts joining me to talk about what they’re expecting in this crucial week.
Bill Murphy, Dave Kranzler, Andy Schectman, Rafi Farber, David Stein, Lawrence Lepard, and more!
So to find the kind of insight into the silver market that Wall Street wouldn't be able to locate with a roadmap and a compass, click to watch this important roundtable discussion now!
video here>>> https://silverseek.com/article/paper-silver-market-starting-unravel
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What A Week This May Be In Silver!
February 22, 2021
A few days to go before we find out how much silver is really needed…
by J. Johnson via JS Mineset
Great and Wonderful Monday Morning Folks,
It’s the day before our precious metals options for March come off the board and Gold is totally ignoring it (for now) with the trade up $17.50 at $1,794.90 and right close to the high at $1,797.70 with the low at $1,778.60. Silver is doing the same, and with good reasons too, with its trade at $27.54, up 24.7 cents after hitting a high of $27.83 with the low nearby at $27.385. The US Dollar seems like it wants to test its lows with the trade down 9.8 points at 90.265 after it was pushed up to 90.575 with its low nearby at 90.205. Of course, all this happened before 5 am pst, the Comex open, the London close, and after Disney labels the multi-generational Muppets Show offensive and now requires a disclaimer before watching. Apparently, there are some who are offended by sock puppets and cannot seem to simply turn the channel like adults use to do in the old days.
Venezuelan’s now have to pay an additional 262.67 for an ounce of Gold with the last trade at 17,926.56 Bolivar with Silver buyers doing the same, paying an additional 4.50 Bolivar over Friday mornings price, with the last buy at 275.05. In Argentina, Gold is priced at 159,885.80 Peso’s proving an increase of 2,378.62 with Silver buyers seeing a 40.77 A-Peso gain with its last buy price at 2,453.21. Over in Turkey, Gold has finally turned higher with its last price at 12,623.08 Lira, proving a gain of 296.21 with Silver gaining 5.05 T-Lira’s with its last price at 193.86.
February Silver’s Delivery Demands now shows a post of 339 fully paid for 5,000-ounce contracts waiting for receipts, with another early morning without a price post, yet Mr. Resolute stepped in with one of the “spread trade entries” as 109 contracts got swapped and are now posted in the Volume column. Friday’s full day of trade had a total of 8 contracts being purchased in between $27.55 and $27.255 with the last buy at the low, a gain of 17.5 cents that helped reduce the demands by 27 contracts, as we wait to see what else Comex can hide behind the price. Silver’s Overall Open Interest continues to wane as another 1,140 paper contracts left the field of play leaving a total of 179,942 overnighters willing to keep the markets liquid, with the last “Buy Day” for this month, being this Wednesday. What a day to buy it all and spike the ball!
February Gold’s Delivery Demands are still very heavy with 2,371 fully paid for 100-ounce contracts still waiting for receipts with an additional 9 swaps, during the London trade, with a price range between $1,791.60 and $1,784 with the last buy at $1,788.60, up $12.80 so far today. Friday’s full day of delivery activity happened in between $1,787.60 and $1,764.30, with a total of 118 completed swaps giving us a closing price at $1,775.80, a gain of $2.40 on the day, which helped reduce the demand count by 802 contracts that got receipts somewhere, maybe. Gold’s Overall Open Interest lost another 4,192 paper contracts going against the physicals and the options, leaving a total of 494,183 paper contracts to keep the market liquid, but not the physicals.
C-PAC will be held between Feb. 25-28 with former president Trump being one of the key speakers, yet ex VP Pence declined to attend, hmmm. Maybe Trump will explain why to the crowds, after his freedom of speech got restricted, by the Big Tech leaders; Twitter, Facebook, and the rest of the Section 230 butthurts. Another hero of mine will be speaking at the C-PAC, is James O’Keefe from Veritas Videos who has done a stellar job exposing the voter fraud issues over these last 2 presidential elections. I ask, why are those conservatives, that refused to view the voter fraud hearings, not attending? Is there a split going on?
What a week this may be! We have in order; the precious metals options (with all those Deep in the Money Calls) expiring tomorrow. Next is the Last Trading Day to buy Comex’s February Physicals (in deep discount to the street price) – Wednesday, with Thursday’s C-PAC start up, then Friday being the First Notice Day for the March Precious Metal Deliveries. We also have 59,937 contracts (controlling 299,685,000-ounces) in March Silver, still in trade, with a few days to go before we find out how much is really needed.
Have a great day, and hang on to your physicals in a world of paper promises and political gamery. Having physicals in hand, gives comfort as things unwind, daily. As Always …
Stay Strong!
J. Johnson
More J. Johnson content is available with purchase of a JSMineset subscription.
https://www.silverdoctors.com/silver/silver-news/what-a-week-this-may-be-in-silver/
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Roy Orbison moving us down the line this fine morning
https://jessescrossroadscafe.blogspot.com/
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METALS-Copper's spectacular rally slows at 9 1/2-year highs
LONDON, Feb 23 (Reuters) - Copper touched a new 9-1/2 year high on Tuesday before easing back as investors consider whether strong demand and tight supplies are enough to extend a breathtaking rally.
Benchmark copper on the London Metal Exchange was up 0.2% at $9,112 a tonne at 1140 GMT, having reached $9,305, the highest since August 2011.
Prices have shot up 16% in February, the biggest monthly rise since November 2016, taking gains since the start of 2020 to around 50%.
Many analysts expect demand from the power and construction industries to overwhelm supply, potentially pushing prices into record territory above $10,190 a tonne.
Copper may need to pause in the short term, but the outlook is bullish, said independent analyst Robin Bhar. “I would expect corrections to be pretty short lived,” he said.
DEFICIT: The roughly 24 million tonne a year refined copper market is already in deficit and was undersupplied by 589,000 tonnes in the first 11 months of 2020, the International Copper Study Group (ICSG) said.
POSITIONING: Speculators have piled into the market with net longs in LME copper at 54% of open contracts and in Shanghai Futures Exchange (ShFE)copper at 39% of open contracts by the end of last week, brokers Marex Spectron said.
Shanghai Dalu Futures, a brokerage, amassed a $1 billion long position in four days after the Chinese New Year celebrations ended last week, ShFE data shows.
CHINA: Yangshan copper import premiums rose to $75 a tonne, the highest since August, pointing to solid demand in top consumer China. SMM-CUYP-CN
STOCKS/SPREAD: Inventories in LME-registered warehouses are near their lowest since 2005 and traders are paying premiums for quickly deliverable metal. MCUSTX-TOTALCMCU0-3
MARKETS: Global stock markets fell. The dollar strengthened and oil prices rose.
COPPER/NICKEL SUPPLY: Zambian copper output rose 10.8% last year to 882,061 tonnes and Philippine nickel output increased 3% to 333,962 tonnes, according to government data.
PRICES: LME aluminium was down 0.7% at $2,152 a tonne, zinc was 0.5% lower at $2,885, nickel fell 0.8% to $19,335, lead slipped 0.2% to $2,148 and tin was up 0.5% at $26,740.
All are at or near multi-year highs. (Reporting by Peter Hobson. Additional reporting by Mai Nguyen. Editing by Mark Potter)
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All that glitters is not gold
Investors are seeing the longer-term potential of platinum group metals.
22 February 2021 12:39 / By Trent Hodges - Gray Capital
Although gold has been a strong performer over the years, investors are seeing the longer-term potential of platinum group metals (PGMs) which include platinum, ruthenium, rhodium, palladium, osmium, and iridium.
The primary use for these metals is in emissions reduction, particularly in catalytic converters in vehicles. Jewellery is an important source of demand as well, while PGMs are also used in the electrical, medical and forensic industries.
But the real magic lies in the role of these metals in reducing emissions, clearly a global imperative as governments turn up the pressure on climate change and decarbonisation.
Don’t make the mistake of assuming that only platinum is important. For example, the past decade has seen increased demand in palladium as a cheaper alternative to platinum that is still effective in petrol-powered cars. Platinum is the only option for diesel cars, but these have dropped significantly in popularity in the wake of emissions scandals in Europe.
It may come as a surprise to you that South Africa has more than 80% of the world’s platinum reserves and is the largest producer in the world of PGMs.
Due to our critical importance in the global supply chain, our ongoing issues in this country give price support to platinum. Load shedding, any potential labour issues and the general lack of a Covid-19 vaccine has assisted in creating worries over supply, which helps to drive the price higher.
Year-to-date, the platinum price is up nearly 20%. Over 12 months, the increase is 32%. In case you need a reminder of how important market timing can be, the increase over five years is only 39%. In other words, the real price action has been in the past 12 months.
Platinum is primarily an industrial metal, rather than a store of value. It suffered a precipitous drop in March 2020, down 40% from the peak in January 2020. Although South African challenges help the price, there’s minimal demand for platinum when new cars aren’t being built and sold.
For investors who are bullish on this space, one option is to invest directly in platinum itself, although that doesn’t consider the supply-demand dynamics and potential benefits of the other PGMs.
Platinum is currently trading at similar USD price levels to 2006, so it hasn’t been a good investment over the past 15 years or so unless you consider ZAR depreciation. In contrast, gold is trading 4 – 5x higher than it was in the mid-2000s (again in USD).
Tied to the fortunes of the broader economy due to its application in the new vehicle industry, platinum isn’t a hedge in equities portfolios in the same way that gold is. It requires investors to take a more active view on the demand and supply realities, as well as the fundamentals of the leading miners in this space.
Assuming the metal itself isn’t the preferred option for any given investor, the alternative would be to buy a selection of PGM mining houses or to even back a specific stock (obviously the riskiest option of them all with no diversification).
Share price growth in the mining companies is tied closely to metal prices rather than the timing of financial results. This is because analysts can predict earnings with reasonable levels of certainty, based on the rand price of the metal in question and an approximation of the cost of production.
This is the reason why recent blockbuster results from South African mining houses haven’t necessarily caused significant jumps in share prices. The financial results are largely priced-in, based on the average price of the metal during the reporting period which ended in December for many of these miners.
Over 12 months, Impala Platinum (JSE: IMP) is up 41%, Sibanye-Stillwater JSE: SSW is up 38% and Anglo American Platinum (Amplats) JSE: AMS is up 26%. The really incredible story has been Jubilee Metals JSE: JBL , a tailings business that reprocesses PGM and other metals. The company is up 346% in the past 12 months! When you get it right with small caps, the rewards are significant. So are the risks.
Amplats and Impala Platinum are pure-play opportunities in the PGM space. Sibanye-Stillwater is a more diversified play, with platinum operations in the US and South Africa as well as gold operations locally.
Mining giants must constantly balance current prices against future expectations. It takes years to execute a mining project, by which time the forces of supply and demand will probably look different.
This is why mining is a high-risk, high-reward game.
Sibanye-Stillwater is perfect evidence of this. After the Stillwater merger in 2017 which left the company with a massive debt pile, the recent rally in the prices of PGMs helped the company beat the debt trap and post incredible profits of nearly R30bn.
Sibanye-Stillwater acquired Lonmin in 2019 in an all-share offer that valued the PGM business at R4.3bn. This includes the Marikana complex, which is a PGM juggernaut that has a sad history. The Marikana massacre of 2012 will never leave the memories of South Africans and especially the people affected, but the mine today is a jewel in Sibanye’s crown.
Sibanye recently confirmed a further R3.9bn investment into K4 at Lonmin. CEO Neal Froneman is outspoken and critical of the South African government, so this investment would not be approved by the group unless they are feeling confident about the future of PGMs.
Considering this project will take eight years to complete, it’s a strong show of faith in PGMs from one of the most iconic leaders in the industry.
All that glitters is not gold after all.
https://www.moneyweb.co.za/financial-advisor-views/all-that-glitters-is-not-gold/
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.
Is the paper silver market starting to unravel?
February 22, 2021
The longer you’ve followed silver, the longer you've known that at some point the price was going to have to move higher. And probably by a lot.
At this point, this is by far the most intense I have ever seen the situation in the 12 years I've been following the silver market. And fortunately, for this Sunday's open in the far east, I have an All-Star cast of silver experts joining me to talk about what they’re expecting in this crucial week.
Bill Murphy, Dave Kranzler, Andy Schectman, Rafi Farber, David Stein, Lawrence Lepard, and more!
So to find the kind of insight into the silver market that Wall Street wouldn't be able to locate with a roadmap and a compass, click to watch this important roundtable discussion now!
video here>>> https://silverseek.com/article/paper-silver-market-starting-unravel
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What A Week This May Be In Silver!
February 22, 2021
A few days to go before we find out how much silver is really needed…
by J. Johnson via JS Mineset
Great and Wonderful Monday Morning Folks,
It’s the day before our precious metals options for March come off the board and Gold is totally ignoring it (for now) with the trade up $17.50 at $1,794.90 and right close to the high at $1,797.70 with the low at $1,778.60. Silver is doing the same, and with good reasons too, with its trade at $27.54, up 24.7 cents after hitting a high of $27.83 with the low nearby at $27.385. The US Dollar seems like it wants to test its lows with the trade down 9.8 points at 90.265 after it was pushed up to 90.575 with its low nearby at 90.205. Of course, all this happened before 5 am pst, the Comex open, the London close, and after Disney labels the multi-generational Muppets Show offensive and now requires a disclaimer before watching. Apparently, there are some who are offended by sock puppets and cannot seem to simply turn the channel like adults use to do in the old days.
Venezuelan’s now have to pay an additional 262.67 for an ounce of Gold with the last trade at 17,926.56 Bolivar with Silver buyers doing the same, paying an additional 4.50 Bolivar over Friday mornings price, with the last buy at 275.05. In Argentina, Gold is priced at 159,885.80 Peso’s proving an increase of 2,378.62 with Silver buyers seeing a 40.77 A-Peso gain with its last buy price at 2,453.21. Over in Turkey, Gold has finally turned higher with its last price at 12,623.08 Lira, proving a gain of 296.21 with Silver gaining 5.05 T-Lira’s with its last price at 193.86.
February Silver’s Delivery Demands now shows a post of 339 fully paid for 5,000-ounce contracts waiting for receipts, with another early morning without a price post, yet Mr. Resolute stepped in with one of the “spread trade entries” as 109 contracts got swapped and are now posted in the Volume column. Friday’s full day of trade had a total of 8 contracts being purchased in between $27.55 and $27.255 with the last buy at the low, a gain of 17.5 cents that helped reduce the demands by 27 contracts, as we wait to see what else Comex can hide behind the price. Silver’s Overall Open Interest continues to wane as another 1,140 paper contracts left the field of play leaving a total of 179,942 overnighters willing to keep the markets liquid, with the last “Buy Day” for this month, being this Wednesday. What a day to buy it all and spike the ball!
February Gold’s Delivery Demands are still very heavy with 2,371 fully paid for 100-ounce contracts still waiting for receipts with an additional 9 swaps, during the London trade, with a price range between $1,791.60 and $1,784 with the last buy at $1,788.60, up $12.80 so far today. Friday’s full day of delivery activity happened in between $1,787.60 and $1,764.30, with a total of 118 completed swaps giving us a closing price at $1,775.80, a gain of $2.40 on the day, which helped reduce the demand count by 802 contracts that got receipts somewhere, maybe. Gold’s Overall Open Interest lost another 4,192 paper contracts going against the physicals and the options, leaving a total of 494,183 paper contracts to keep the market liquid, but not the physicals.
C-PAC will be held between Feb. 25-28 with former president Trump being one of the key speakers, yet ex VP Pence declined to attend, hmmm. Maybe Trump will explain why to the crowds, after his freedom of speech got restricted, by the Big Tech leaders; Twitter, Facebook, and the rest of the Section 230 butthurts. Another hero of mine will be speaking at the C-PAC, is James O’Keefe from Veritas Videos who has done a stellar job exposing the voter fraud issues over these last 2 presidential elections. I ask, why are those conservatives, that refused to view the voter fraud hearings, not attending? Is there a split going on?
What a week this may be! We have in order; the precious metals options (with all those Deep in the Money Calls) expiring tomorrow. Next is the Last Trading Day to buy Comex’s February Physicals (in deep discount to the street price) – Wednesday, with Thursday’s C-PAC start up, then Friday being the First Notice Day for the March Precious Metal Deliveries. We also have 59,937 contracts (controlling 299,685,000-ounces) in March Silver, still in trade, with a few days to go before we find out how much is really needed.
Have a great day, and hang on to your physicals in a world of paper promises and political gamery. Having physicals in hand, gives comfort as things unwind, daily. As Always …
Stay Strong!
J. Johnson
More J. Johnson content is available with purchase of a JSMineset subscription.
https://www.silverdoctors.com/silver/silver-news/what-a-week-this-may-be-in-silver/
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