Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : North American Palladium(AMEX:PAL)- PGM Producer -- Ignore unavailable to you. Want to Upgrade?

To: GeoDude who wrote (836)	1/11/2001 9:34:52 AM
From: Bruce Robbins	Read Replies (1) \| Respond to of 976

LIA: There is presently a supply deficit in Pd- in 1999, according to the CPM Group this deficit was 1.3 million ounces. If that is still the case for 2000, I doubt there could be enough new production to offset that. As for strategic supplies, I am not sure but I think the US Defense stockpile of Pd is no longer there. The Russians supposedly have a hoard, but from what I gathered through various discussions on SI, this hoard may or may not exist and if it exists it may be frozen as security for IMF loans. If you have ever seen pictures of the Noril'sk operation, you would wonder how anybody could produce something in a place like that. The Russians are the wildcard here- but why would they want to screw with the price rise. As with any commodity that is at a high price and high demand, the forces that be are working hard to eliminate their pain. Substitution in autocatalysts by Pt has been announced by the automakers, but this will take several years to implement and Pt ain't cheap either (same supply problems). With palladium rising, you can imagine that there is some hoarding going on right now. PDL's timing for exploration and expansion was perfect. 2001 is going to be a very good year IMO. Bruce PS The most recent production statistics I could find for Pd are at the following links: Johnson Matthey Platinum 2000 Interim Review (Published November 2000)- platinum.matthey.com "Despite the fall in purchases by the auto industry, the amount of palladium used in catalysts this year will increase by just over 20 per cent as more cars are manufactured to meet tighter emission standards in the USA, Europe and Japan." February 2000, USGS Mineral Commodity Survey showing PGM statistics for 1999: minerals.usgs.gov December 2000, USGS Precious Metals Monthly for July 2000: minerals.usgs.gov And of course the CPM reports (with a few quotes): From CPM Press release July 2000- cpmgroup.com > Total palladium supply could rise 4.5% to 5,877,000 ounces in 2000. Russian exports could rise slightly to 1,800,000 ounces, while mine production could expand to 2,766,000 ounces. > Industrial palladium demand is projected to decline 2.7% this year to 6,742,000 ounces. Only automotive demand is expected to post an increase this year, perhaps totaling 2,635,000 ounces. > The net deficit in the palladium market is forecast to contract this year to 865,000 ounces, down from 1,310,000 ounces in 1999, but still representing a large shortfall. From the CPM PGM Survey 2000 July 2000- cpmgroup.com "The palladium story is the platinum story told with the volume turned up all of the way. If platinum has been in a deficit for three years that ballooned to 440,000 ounces last year, palladium is a market in which the current supply deficit has totaled 1.4 and 1.3 million ounces respectively over the past two years. The deficit last year approached 19% of total demand, meaning that almost one in five ounces of palladium used by fabricators in 1999 had to be coaxed from investors and others holding metal inventories. Similarly, if platinum prices were 27% higher this year through May, palladium prices were 71% higher. Platinum has risen $200 from $350 a year ago to around $550 recently, approaching its levels of the late 1980s. Palladium has risen from less than $350 a year ago to prices around $600 - $650, to record levels, having touched $816 on a Nymex nearby settlement basis and $840 in the spot market. Five years ago the dollar value of annual new supply of palladium entering the market was $952 million, less than half the $2.1 billion in platinum trade. Last year the value of new physical palladium supply surpassed platinum, totaling $2.0 billion compared to $1.8 billion for platinum. This year the value of palladium supply is on track to hit $3.4 billion, compared to $2.5 billion for platinum and approaching the $3.6 billion value of new silver supply. (The table with all of this information is on page 29 of the Survey, for future reference.) In short, the palladium market has been growing rapidly in importance in recent years. This chart shows the interplay between supply and demand, including the long period of market surpluses, which we have been drawing down since 1997, and the large deficits of the past two years."