Updating Message 32387691
(1) Shuffled a bit last night after pondering for a few days
(1-i) Closed the long put position <<Long BA Nov 15th Put strike 325 @ 4.05>> at 2.52, figured did not need the hedge for the other still-open position <<Shorted BA Nov 15th Put strike 335 @ 6.55>> even as there seems to be some roaches still coming out into the light zerohedge.com Passengers Pray And Swig Whisky As Boeing 737 Suffers Engine Failure Flying To Florida and Airbus continues to score well bloomberg.com Airbus Close to Winning $30 Billion-Plus Order from IndiGo.
In any case, the pair-trade at separation was profitable, and now the short should go on to more profit, i hope.
(1-ii) Shorted equal troy ounces of palladium against platinum
- Shorted Palladium PALL finance.yahoo.com @ 169.01
- Long Platinum PPLT finance.yahoo.com at 86.86
Am prepared to Progressively go up to 10X position by-and-by should the gap between PALL / PPLT open up further; believe the gap already qualifies as absurd, but can always go crazy absurd.
I believe folks might start to treat palladium as a precious metal instead of what it actually is, an industrial commodity.
(2) Entire tradable order of battle looks so
(2-i) Short GDXJ finance.yahoo.com Nov 15th Put strike 37 @ 1.27
(2-ii) Short GLD finance.yahoo.com Nov 15th Put strike 139 @ 1.21
(2-iii) Short SIL finance.yahoo.com Nov 15th Put strike 28 @ 0.56
(2-iv) Short TLT finance.yahoo.com Nov 15th Put strike 136.50 @ 1.16
(2-v) Short BIIB finance.yahoo.com Nov 15th Put strike 285 @ 8.60
(2-vi) Short SDC finance.yahoo.com Nov 15th Put strike 10 @ 0.95
(2-vii) BA (Boeing) finance.yahoo.com
- Shorted BA Nov 15th Put strike 335 @ 6.55
(2-viii) Short TLT Dec 20th Put strike 138 @ 2.35
(2-ix) Long QQQ finance.yahoo.com Dec 20th Put strike 160 @ 0.45
(2-x) Short SPY finance.yahoo.com Dec 20th Put strike 298 @ 6.43
(2-xi) Long (forever) HKEX finance.yahoo.com at all sorts of prices and taking in dividends (meaning position at loss state) at dividend adjusted cost basis of HK$ 282 (ouch)
(2-xii) Long Hang Seng Bank finance.yahoo.com @ HK$ 169.90
(2-xiii) Long China Mobile finance.yahoo.com @ HK$ 66.45
(2-xiv) Long paper gold since forever, cost basis ~$1,337 per troy ounce
(2-xv) Palladium against platinum
- Shorted Palladium PALL finance.yahoo.com @ 169.01
- Long Platinum PPLT finance.yahoo.com at 86.86
(3) Re palladium
bloomberg.com
Why Palladium Is Suddenly the Most Precious Metal
Eddie van der Walt
LISTEN TO ARTICLE
Palladium is now the most valuable of the four major precious metals, with an acute shortage driving prices to a record. A key component in pollution-control devices for cars and trucks, the metal’s price doubled in little more than a year, making it more expensive than gold.
1. What is palladium?It’s a lustrous white material, one of the six platinum-group metals (along with ruthenium, rhodium, osmium, iridium and platinum itself). About 85% of palladium ends up in the exhaust systems in cars, where it helps turn toxic pollutants into less-harmful carbon dioxide and water vapor. It is also used in electronics, dentistry and jewelry. The metal is mined primarily in Russia and South Africa, and mostly extracted as a secondary product from operations that are focused on other metals, such as platinum or nickel.
2. Why is it getting more expensive?Supply hasn’t responded to growing demand. Usage is increasing as governments, especially China’s, tighten regulations to crack down on pollution from vehicles, forcing automakers to increase the amount of precious metal they use. In Europe, consumers bought fewer diesel cars, which mostly use platinum, and instead chose gasoline-powered vehicles, which use palladium, following revelations that makers of diesel cars cheated on emissions tests.
Precious MetalA shortage of palladium has sent prices soaring
Data: Bloomberg
3. Why is supply so tight?Palladium’s status as a byproduct to platinum or nickel mining means output tends to lag price gains. In fact, the amount produced is projected to fall short of demand for an eighth straight year in 2019. That’s helped drive prices to successive records. While some obscure metals are still more valuable, palladium traded above gold for most of this year.
Growing ShortagePalladium has been in deficit since 2012
Source: Metals Focus
4. Are speculators driving up the price?Partly. Since August 2018, hedge funds have increased bets that prices will rise. Yet palladium for immediate delivery trades at a premium to material for delivery later, suggesting manufacturers are scrambling for supply. And palladium-backed exchange-traded funds saw net-outflows this year as investors withdrew metal, then leased it to users at lucrative rates. There has also been anecdotal evidence of stockpiling in China, the biggest buyer in the automotive sector.
5. Who are the winners and losers?While Russia’s MMC Norilsk Nickel PJSC is the biggest palladium producer, the rally is especially good news for South Africa’s platinum miners, who dig it up alongside their primary metal and are dealing with platinum prices hovering near decade lows. On the other hand, carmakers are having to pay more for the metal and may eventually pass the increase on to consumers.
6. Is palladium usually this volatile?Yes, and not just palladium. Precious metals used in small quantities by the auto industry have a history of price spikes when demand outstrips supply. In the decade following 1998, platinum soared more than 500% as a shortage caught the attention of speculative buyers. Rhodium rallied more than 4,000% over a similar period before carmakers found ways to use less. Palladium itself jumped ninefold from its lows in 1996 to a peak in 2001 as users worried Russian sales would slow.
7. Can automakers use an alternative?It’s true that palladium’s rise relative to platinum might prompt some carmakers to work on substitution. However, it’s uncertain when a switch will happen. Research into the use of platinum shows that technological advances are needed before it can match the performance of existing palladium-based catalytic converters, according to Johnson Matthey Plc, which makes the devices. Analysts have said it could take up to 18 months to incorporate a switch. And the likes of Daimler AG are more focused on electrification and batteries than a metal that represents a relatively small part of costs.
8. Where do electric cars fit into the picture?Electric cars don’t burn fuel, don’t have exhaust pipes and don’t use palladium. Still, most analysts believe the electrification of the majority of the world’s automotive fleet is many years in the future. In the meantime, palladium use in hybrid vehicles is also a growing source of demand.
The Reference ShelfThe history and science of palladium.The market outlook from autocatalyst-maker Johnson Matthey.Bloomberg Intelligence data on palladium and platinum.More on Chinese demand for palladium. A QuickTake on how the mining landscape in South Africa is changing.Carmakers cheated on emissions tests -- here’s the impact on palladium.— With assistance by Ranjeetha Pakiam, and Grant Clark
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