Tharisa Share Discussion Threads

[tonytyke2] 17/9/2021 17:07

Have a good weekend Martin!

[martinfrench] 17/9/2021 16:36

its funny sotolo, you post endlessly about rhodium falls and then it rises 10% and you say nothing ? strange isnt it, and dont believe a word you say.

people that are negative on things dont tend to buy / hold unless you are the worst investor in the world

i can see a situation where the mkt will pay us to take rhodium off our hands, i mean its that pointless and worthless now isnt it ?

[tonytyke2] 17/9/2021 15:25

Thanks TBTT, will give it a read this weekend.Thanks for your ongoing comments, valued research and input. Really appreciated!Have a good weekend.TT

[tigerbythetail] 17/9/2021 10:39

The latest Heraeus report is well worth reading. Many of our questions answered!

www.heraeus.com/media/media/hpm/doc_hpm/precious_metal_update/palladium_standard/HPM_-_The_Palladium_Standard_2021.pdf#msdynttrid=oCHhpb_riwx9TU0xuY67p-IpJMiZz3NJclsc8yuInxc

[tonytyke2] 17/9/2021 10:06

Ok, so Rhodium up around 10% this morning on Johnson Matthey base prices.

[sotolo] 17/9/2021 07:59

Great conversations. I am not glum always,I just thought PGM’s were overpriced and would fall, and more so recently as slip from deficit to surplus with chip shortage, which surplus as Tiger says may take a while to work itself out. I continue to hold, as Tiger and other point out, for this being worth its value on chromium alone, so PGM’s are cream. I see no inconsistency in holding as I consider very undervalued while expecting this PGM rise to just be a bounce in PGM prices before the fall continues. Our share price will probably go lower, that is not gloom just rational expectation, but as I consider fundamentally undervalued and I am not a trader, I shall continue to hold because of my OPTIMISM, that fundamentals will out in the end plus this year we should make a third of our valuation alone!

[tonytyke2] 16/9/2021 22:34

Thanks Wimbled.

[tonytyke2] 16/9/2021 22:33

Thanks TigerByTheTail, I have been reading more recently due to all the logistics issues, that some car manufacturers are now moving from a 'just in time' build model to a 'stockpiling' approach.

This could start having a positive effect on the Rhodium price itself, the chip issue should also start resolving itself from Q4-21 onwards.

Thanks for your help, I am looking to add more around this price, but need to raid my wife's piggy bank first....Ha Ha!

[tigerbythetail] 16/9/2021 20:56

Hi Tony!
IMO, it's better to use the JMAT (Johnson Matthey) price tables for rhodium, which change 4 times every day. They represent the price JMAT are asking for rhodium sponge, which is what the car industry uses in cats (c. 87% of total Rh demand).
I believe (?) the Kitco price reflects the tiny market in rhodium coins and bullion, and it bounces around with incredible volatility. In particular, when rhodium drops Kitco lets the bottom fall out of their price - I think because they don't want to buy any rhodium coins in a falling market.
(Kitco prices for platinum and palladium are good, though - they reflect the spot market in these two metals, which are freely traded).
But, yes, rhodium does seem to have stopped falling, and even bounced a bit. Hopefully, automotive buyers are coming in at this "bargain" price.

[wimbled] 16/9/2021 19:26

I've shares in PAF and their BB header has displays PM prices including Rh. Link below.

[tonytyke2] 16/9/2021 19:00

So is that around a 15 % increase in the Rhodium price this afternoon on Kitco.....Mmmmmmm.

[redtrend] 16/9/2021 16:14

The future Chrome profits can be forecast from the last Interims. With a Chrome AISC of under $100tn and so as not to "superglue your crystal ball", you have to apply 2MT of Chrome. So at Chrome $175tn, margin of $75tn x 2MT = $150m, before SA Corp Tax and BEE Interest. And that's being conservative considering the 2MT Chrome increase through Vulcan Project adds little cost and will push down cost per tonne through economies of scale.

Being extremely bearish short-term and bearish long-term on the main commodities THS mines is a bizarre combo to stay invested in.

I happen to disagree with the prognosis ICE cars will be in decline as a total produced any time soon and any incremental decrease will be outweighed by the increase in PGM loadings per car. In 2008 a group of "experts" predicted there would be no ICE cars by 2020... Quite. The same on these 2030/2035 targets will come to pass. The UK is already way out on their target and will be compounded over the years. EU auto makers have already started their lobbying to push any deadline from 2035 to 2040. There is a complete lack of infrastructure, step change in technology (batteries, charging times etc.) no plan on how lithium/ cobalt mining will be ramped up (clue - it can't, unless Cornwall is the Saudi Arabia of Lithium!) and I have no idea when this pie in the sky new battery tech Canetoad mentions on LSE board with no lithium will be ready to actually roll out.

Rather than us arm-chair experts try and 2nd guess PGM demand, JM is far better placed:

hxxps://matthey.com/-/media/files/pgm-market-report/jm-pgm-market-report-may-2021.pdf

[tigerbythetail] 16/9/2021 14:49

Hi Sotolo!
By the way, just to point out the bad result from FY 2019 was caused by the investment required to switch to owner mining from contractor mining, which has since paid off handsomely.
You can see that when those FY 2019 results came out, there was a lurch down in share price from 106p to 81p. (The crash down to the low of 45p in March 2020 was down the wider market crash).
Well, isn't Tharisa in a far stronger position now than it was then? Net cash positive instead of debts, own fleet mining, Vulcan plant, much higher PGM basket price (even now), decent dividends, etc. In short, the current share price is a bit perplexing, and IMO manically depressively overdone.

[tigerbythetail] 16/9/2021 14:28

I think you need to separate short-term effects (i.e. no chips for ICE cars but lots of demand) from medium-long term ones (i.e. end of cats as ICE engines die out).
Right now, we're trying to judge how much speculation there was in rhodium and palladium which has now washed out of the market, releasing ounces, and how much and how quickly automotive demand will recover. If the car industry were working normally, both rhodium and palladium should be in deficit, but take out c. 25% of demand (30% less cars x approx 85% automotive use of both metals), and the two metals must currently be in surplus. When does that reverse again? I'm not sure we'll get back to $30K rhodium again, (because the car makers (esp. Ford) were caught with their pants down the first time around). But (IMO) Rh and Pd prices should strengthen (or at least hold) through 2022-2024.
Famous last words, but I don't see the doom scenario of palladium returning to $1K/oz and rhodium to say $3K per ounce for now.

After say 2025, we're looking at medium term factors coming into play, and I certainly don't expect Pd to be trading at $2K an ounce by 2030. More like $1K on a best case basis. And rhodium will also get hit hard by the end of ICEs. Hopefully, the possibly coming hydrogen economy (platinum, iridium, ruthenium) can save the overall PGM basket price, but it's an open question.

It's up to Tharisa to ride the change here. And hope that their estimate of 5% CAGR in chrome through the 2020s is correct.

Don't forget that Vulcan will add about 400,000t per year of ultra-low cost chrome ($10/t? opex). So that should help chrome profits very nicely in the future. All told, Vulcan is looking like a clever investment right now.

[jon4567] 16/9/2021 14:21

Hi Sotolo why so glumy all the time? Do you ever look at the positives in life?

[sotolo] 16/9/2021 13:45

Tiger I don’t mean to be Cassandra but if you superglue your crystal ball you will see it says this is just a bounce in very oversold rhodium, so more fall to come; and if you read Canetoad and others over on the other board you will see mid term concern on the rise of electric cars. This is not only in Europe and US but also China which has mandated 40% of cars sold must be electric by 2030 which is not that long, and a small world change in total ice affects the supply demand ratio for rh etc and so the price radically as we have seen with chips. So if PGM profits become smaller my question is how much profit do we make from chrome now and what are the prospects? Interesting to see in 2019 made overall roughly £5m and in 2020 £40m, so our profit swings hugely but if was to settle around £25m would be a PE of 10 which is respectable - tho 2019 dividend was only just over a ha’penny which would be half a per cent at this share price! However this was before extra SA tax

[tigerbythetail] 16/9/2021 12:42

80p? Maybe. Maybe not. My crystal ball is broken.
But, rhodium and palladium have stopped falling for now - palladium has bounced back to $2,000 / oz (spot price) and rhodium seems to be holding at about $11,250 / oz (JMAT).
It's worth opening THS's chart out to a five year view and comparing it against the basket price for PGMs (and chrome) over that period. It's trading way under its historical norms.
And yet business has never been better for THS. The company is net cash positive, (with a huge trade receivables - trade payables balance as well), has gone from contractor mining to its own fleet, and has built (presumably all but complete now) the Vulcan plant, which will supply an extra 400,000t of ultra-cheap chrome per year.
Barring unexpected bad news, it doesn't make sense for THS to be trading even at today's price, let alone 80p. It's taking far longer than we all hoped, but the automotive chip supply chain will sort itself out eventually, and actual demand for vehicles is reported to be very strong.

[tenpercent] 16/9/2021 12:02

No support on the chart now. Next stop 80p

[scooper72] 16/9/2021 11:11

I'm down about 30% but am thinking with the dividend at over 7% and the div cover being 4x it probably makes sense at this point to hold.

[ukgeorge] 16/9/2021 10:51

Sadly looks like 80p is looking likely. Very annoying and I got sucked in by the high rhodium price. Oh well If it drops to that I will be buying. Roll on some good results and the capital spending dropping.

[sotolo] 15/9/2021 17:16

Martin I think this is one of the most intelligent and courteous boards, thanks. What I have posted for many months is that Rhodium was in a bubble but even if it falls by a large percentage fundamentally (which is how I invest) it doesn’t matter to me as the profit from Chromium alone is enough to justify the price to me. The market can pay what it wants, I joined as a long term holder.

[martinfrench] 15/9/2021 12:44

you must think we are 2 yrs old with an iq to match

"oh look i've bought everything at or near the peak but hey i've gone against my other thoughts to just hold even though i post non stop about the downfall of rhodium on a daily basis"

really believable........

more likely one of those that missed the initial pgm surge last year

[sotolo] 15/9/2021 07:59

Xx Whitehunter