Palladium supply and demand

[oak333]

This is from the presentation of the CEO of Sibanye Gold.

He discusses supply and demand from the point of view of his company.

https://www.fool.com/earnings/call-t...it-receip.aspx

A few points:

Platinum is also used in renewable energy, with hydrogen economy to be
the energy of the future.

No other company in the world has this combination of gold and PGM.

Resources and reserves of 63 Moz (million oz), 40 % in South Africa, 38 %
in USA.

Company can mine and deliver Palladium and Rhodium....but not when Platinum is depressed.
My note: Sibanye is the world's largest producer of Platinum.

Company produces more Platinum and Palladium from recycling than from mining.

Loadings of Palladium and Rhodium (in autos) have offset the reduction in car sales.
That is what drives their prices.

There is not a lot more supply coming from secondary sources or recycling.

We have deficits with no short term change in demand and no short term
opportunities to increase supply....this is going to last 4-5 years.

Rhodium-even more dire. It comes mostly from UG2 mining in South Africa, with
a lack of investments from 2008. Decreasing supply of Rhodium...it cannot substitute
Palladium.

Platinum has turned, the market is tightening.

Platinum will start to substitute Palladium. Company is testing it together with BASF,
with road testing and even manufacturers testing. Substitution of Palladium with
Platinum is closer than you think.

[motocat]

Platinum will start to substitute Palladium. Company is testing it together with BASF,
with road testing and even manufacturers testing. Substitution of Palladium with
Platinum is closer than you think.

Ok -- so are you also starting to go with platinum instead of palladium, given the coming substitution? Or are there month or even years more to go with palladium scarcity? (The substitution is happening a lot slower than I guessed).

[oak333]

Ok -- so are you also starting to go with platinum instead of palladium, given the coming substitution? Or are there month or even years more to go with palladium scarcity? (The substitution is happening a lot slower than I guessed).

https://www.fool.com/earnings/call-t...it-receip.aspx

As the CEO says in the report above, substitution of Palladium with Platinum is tested
with BASF, on the roads and even with manufacturers. It is closer than we think...he says.
He also says that the scarcity of Palladium might last 4-5 years.

Investors go with the realities, not with personal preferences.

[oak333]

Substitution of Palladium with Platinum
--------------------------------------------

In dollar terms, how much is it worth ? Let us say that a car uses 1/3 oz (cca 10 grams)of Palladium,
which is valid for bigger cars. Usual cars use 2-6 grams of Palladium.

https://www.websitewithnoname.com/20...hodium-in.html

How much is the difference between Palladium price and Platinum price ?
Palladium=2,600 $ / oz
Platinum = 1,000 $/ oz
Difference per oz =1,600 $
Difference per 1/3 oz (in cars) = 533 $ let us say difference is roughly
500 $ per car. Manufacturers will not bother so much about it.

Additionally, for manufacturers there is a big problem in substituting
Palladium with Platinum: permitting and licensing . If something goes
wrong with the car emissions, the fines are huge. Remember the
Volkswagen scandal ?

So a difference of 500 $ per car with Platinum instead of Palladium is probably
pushing the manufacturers, but it is not a real bother.

[yellowsnow]

Substitution of Palladium with Platinum
--------------------------------------------

In dollar terms, how much is it worth ? Let us say that a car uses 1/3 oz (cca 10 grams)of Palladium,
which is valid for bigger cars. Usual cars use 2-6 grams of Palladium.

https://www.websitewithnoname.com/20...hodium-in.html

How much is the difference between Palladium price and Platinum price ?
Palladium=2,600 $ / oz
Platinum = 1,000 $/ oz
Difference per oz =1,600 $
Difference per 1/3 oz (in cars) = 533 $ let us say difference is roughly
500 $ per car. Manufacturers will not bother so much about it.

Additionally, for manufacturers there is a big problem in substituting
Palladium with Platinum: permitting and licensing . If something goes
wrong with the car emissions, the fines are huge. Remember the
Volkswagen scandal ?

So a difference of 500 $ per car with Platinum instead of Palladium is probably
pushing the manufacturers, but it is not a real bother.

it is easy to brush it off in comment.
remember, it is a known fact car makers would skim on cost even if better part cost pennies more.
ten of thousands or even million of lives could have saved if car makers replaced the flawed design part that THEY KNOW ALREADY and cost pennies more per car.
I highly doubt car makers overlook 500$/car saving, it is a guarantee cost saving.

secondly, using VW scandal is a bad example. VW management knew and intentionally rig the test and emission circuitry.
A new Pt catalytic converters can easier by tested by 3rd party and oversee by gov't agency. Car makers would never be liable for something gov't approved

[sasksilver]

Being Ford alone builds a vehicle every 10 seconds worldwide...that is alot of money at $500 a piece. That is just one automaker....what company would knowingly lose $500 per 10 seconds....do the math roughly 4 million a day

[oak333]

it is easy to brush it off in comment.
remember, it is a known fact car makers would skim on cost even if better part cost pennies more.
ten of thousands or even million of lives could have saved if car makers replaced the flawed design part that THEY KNOW ALREADY and cost pennies more per car.
I highly doubt car makers overlook 500$/car saving, it is a guarantee cost saving.

secondly, using VW scandal is a bad example. VW management knew and intentionally rig the test and emission circuitry.
A new Pt catalytic converters can easier by tested by 3rd party and oversee by gov't agency. Car makers would never be liable for something gov't approved

Well, it is your opinion against the opinion of the CEO of Sibanye Gold

https://www.fool.com/earnings/call-t...it-receip.aspx

Read carefully page 22 of this presentation. I quote:

"We always envisaged together with some analysts, one sitting here, that 400$ or 500 $ an ounce
was the trigger. But we always qualify that as well by saying that that's the point where where I
think end users would start doing the work. Today, to make those type of switches there is quite
a lot-it is quite onerous. There is competing technologies. So, first of all, end users are doing a
lot of work in the battery electric space and it's not a big issue for them a 400 $ or 500 $ price difference,
IT REALLY MAKES VERY LITTLE DIFFERENCE ON A CAR. But I think they are also concerned about all the
permittting issues, the licensing issues and if they get it wrong, the fines are humongous. And I mean it is
a sort of class action you have against someone like Volkswagen."

It is all clear.

Maybe a confusion could appear from the 500 $ difference. That difference refers to the difference
in price per oz between Palladium and Platinum. That difference was NOT meant as the difference
between loadings of Palladium or Platinum say 10 grams per car, at a price of Palladium of 2,600 $/oz
and Platinum at 1,000 $/oz.

[yellowsnow]

Well, it is your opinion against the opinion of the CEO of Sibanye Gold

https://www.fool.com/earnings/call-t...it-receip.aspx

Read carefully page 22 of this presentation. I quote:

"We always envisaged together with some analysts, one sitting here, that 400$ or 500 $ an ounce
was the trigger. But we always qualify that as well by saying that that's the point where where I
think end users would start doing the work. Today, to make those type of switches there is quite
a lot-it is quite onerous. There is competing technologies. So, first of all, end users are doing a
lot of work in the battery electric space and it's not a big issue for them a 400 $ or 500 $ price difference,
IT REALLY MAKES VERY LITTLE DIFFERENCE ON A CAR. But I think they are also concerned about all the
permittting issues, the licensing issues and if they get it wrong, the fines are humongous. And I mean it is
a sort of class action you have against someone like Volkswagen."

It is all clear.

Maybe a confusion could appear from the 500 $ difference. That difference refers to the difference
in price per oz between Palladium and Platinum. That difference was NOT meant as the difference
between loadings of Palladium or Platinum say 10 grams per car, at a price of Palladium of 2,600 $/oz
and Platinum at 1,000 $/oz.

I wouldn't value of a mining ceo talking about business of making and selling car

[motocat]

I wouldn't value of a mining ceo talking about business of making and selling car

Yup, I wish we could hear from someone who actually is in the business of profiting form the production of catalytic converters.

[midiman]

All these semi conductor and production cuts are killing me.

It is damaging the markets and I have seen $$$$ wiped off the value of Rh.

I was reading an article that said most manufacturers will be ramping up production again before the end of the year so that they are able to meet any demand pressures in the new year.

I hope this is true because the demand has certainly not gone away.

People can't get vehicles right now!! But the value of RH and PD are going down.

The miners need to cut back on production too or else we are going to go into a surplus when we should have been in deficit for 2 years.