Jubilee Metals Share Discussion Threads

[robers98] 13/8/2021 08:15

Palladium Rally Threatened by Automakers’ Pivot to Platinum

A rally in palladium that’s seen it more than triple in value since mid-2018 looks to be nearing its end as demand headwinds build.

Around 85% of global supply of the silvery-white metal is used in pollution-reducing catalytic converters in gasoline engines. The surge in prices coupled with advances in technology, however, are making it more attractive for automakers to use the much cheaper platinum. Further out, palladium faces an existential threat as electric vehicles gradually replace those using gasoline, meaning the current rally could well be its last.

Palladium has trounced its fellow major precious metals platinum and gold over the last few years. It benefited from stricter emissions standards in China and Europe as well as a shift away from diesel-powered vehicles, which use platinum in their catalytic converters, following the Volkswagen AG emissions-cheating scandal in 2015. Mine output -- mainly from Russia and South Africa -- has struggled to keep up, resulting in a deep supply deficit.

That saw palladium prices surge past gold and platinum. The metal really took off in 2018, jumping from $834 an ounce in August of that year to above $3,000 in May 2021 before easing to around $2,630.

Greater platinum use in gasoline engines is being driven by the Tri-Metal Catalyst technology developed by German company BASF SE, which makes autocatalysts. The technology allows partial substitution of palladium with platinum and is being introduced in smaller vehicles from 2022 and 2023

“We see the beginnings of platinum being substituted back into gasoline catalytic converters,” said David Jollie, head of sales and market insight at global miner Anglo American Plc. “This will bring palladium back from its fundamental supply deficit and closer to balance.”

Russia’s MMC Norilsk Nickel PJSC is the world’s top palladium supplier followed by South African miners including Sibanye Stillwater Ltd. and Anglo American Platinum Ltd., a unit of Anglo American.

But while the threats are looming, most analysts still see palladium’s rally as having some room to run before it enters a long-term decline:

UBS Group AG sees palladium rising to $2,900 an ounce by year-end and then falling to $2,500 by the middle of 2022 as platinum substitution increases
HSBC Holdings Plc forecasts palladium will average $2,740 an ounce this year. It will then decline to $1,190 in five years, at which point it will be cheaper than platinum

Citigroup Inc. said in mid-July that it expects palladium to rise to $3,200 an ounce within three months and doesn’t see platinum substitution becoming sizable until 2023 or 2024.
Standard Chartered Plc precious metals analyst Suki Cooper said that demand should remain robust for the next couple of years, with palladium averaging $2,790 an ounce this year and $2,625 in 2022 before dropping to $2,200 in 2023.
The post-pandemic recovery in automobile production and tighter emissions standards will support consumption in the near term, Cooper said. Mine output will then pick up on the back of planned developments and, together with slowing demand, that will see palladium move closer to balance, if not into surplus, within the next five years, she said. Citi, while bullish in the short term, sees the market getting close to demand-supply equilibrium in 2023.

[adejuk] 13/8/2021 07:44

i missed it bull. if only.

[dafrog] 12/8/2021 17:48

Down a packet on this. At least it can only drop another 15 p

[1madmarky] 12/8/2021 17:19

Some one (PI) wants out big time. Just have to wait until they're done.

[frogkid] 12/8/2021 17:16

Must be some stop losses getting hit last few weeks. I wonder if Zambia is causing some nerves.

[deme1] 12/8/2021 16:45

15p could well be a possibility.

stroll on 2023

[frogkid] 12/8/2021 15:14

I agree ade, been watching SLP.

[adejuk] 12/8/2021 15:03

frog. i think slp is a good buy at these levels - just as is jlp

[adejuk] 12/8/2021 15:01

:-)
rsi is way oversold.

[frogkid] 12/8/2021 14:53

My tip for losing your shirt is following anybody Lostdas tips

[adejuk] 12/8/2021 14:04

my tip for growth and great divi is aviva.
great results and future prospects - it's not aim though
for orphans and widows

[adejuk] 12/8/2021 13:56

oh dear.
i took his tip on slp but at 98p

[deme1] 12/8/2021 13:27

ade yes originally at £2.40
claimed £25 was on its way
and has kept buying in all the way down

[adejuk] 12/8/2021 13:18

deme
did losta tip avct?

[deme1] 12/8/2021 13:09

imagine buying that dog at £2.40 with the belief that it had a chance of £25 a share!

then again if you sail around the world in an imaginary boat then anything is possible :)

[gsg] 12/8/2021 13:03

Struth, it could be worse. We could be holding avct.

[frogkid] 12/8/2021 09:59

thinking about it, fairly obvious there will be a ZAm announcement soon after the elections

[5teadyeddie] 12/8/2021 09:43

Just my memory but previous references to spare Zambian refining capacity suggested that toll processing deals could be done without the need for capital outlay. This may not be relevant anymore, except as a negotiating tool to drive down the purchase price of an idle smelter, or it may still be Plan A.

LC did restate last week in one of the interviews that Zambian earnings would overtake PGM earnings. Much to come.

[gsg] 12/8/2021 09:27

The day is still young, but looks like my hope/theory re a pre election rns bites the dust.

On the positive note L2 currently looking a bit stronger.

[scrappycat] 12/8/2021 09:27

Which ever party wins the Zambian election, it would seem to be in their interest to provide positive news quickly. Enhanced governmental income and job opportunities result. I imagine the deal is already done in principle, but the destination of the brown envelopes will need to be sorted I suspect.
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[ginko3] 12/8/2021 08:22

I'm sure they will have considered that risk but sometimes there are elements of negotiations that are just outside of your direct control.

[gsg] 11/8/2021 20:40

Would have thought that Jubilee would want to tie up and announce any big Zambian asset purchase before the general election. Which takes place.....errr, tomorrow.

Would negate the possibility of having to deal with a new mining minister and new government policy on asset purchases.

[1madmarky] 11/8/2021 15:00

Can't complain at 1,831 per tonne

[bullster] 11/8/2021 13:45

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H1/2021 Total combined earnings £40,100,00

H1/2021 PGM earnings £36,459,000
H1/2021 Chrome earnings £1,762,000
H1/2021 Copper/Cobalt earnings £1,879,000

H1/2021 1,026 tonnes of copper produced with earnings of £1,831 per tonne (incl. cobalt, qty unknown)

This is early days, the process is still in the optimisation stage, concentrate from Roan is yet only partially upgraded untill Q1/2022. WHI also expect a 25% increase in earnings from the scaling up of production volume through Sable.

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