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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (6918)	5/5/2008 7:52:57 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71456

Thanks. Yes, no futures and very rare metal: resourceinvestor.com But the main demand driver for rhodium seems to be the perception that all 70 million cars and trucks made each year globally today will need a three-way catalytic converter system as original equipment. In fact the OEM American automotive industry in 2006 used, itself, 60% of all of the new rhodium produced that year to make or sell just 17 million cars and trucks, so the global demand must be, in fact, literally insatiable, all things being equal. One nagging problem is that the total annual new rhodium production in grams is 25 million. The U.S. OEM automotive industry uses 15 million of that itself. European car production in total is greater than U.S. production, so if Europe (and Japan) were using as much rhodium as the U.S. per vehicle there would be a massive shortage not just a supply deficiency. Is this stuff, rhodium, even at its sky high price, a sleeper investment in rare metals? It would seem that the price of rhodium must continue to skyrocket as world production of motor vehicles powered by internal combustion engines continues to grow. But this I think is not what’s happening. I think that there is a rhodium bubble. There is no futures market for rhodium, and if you want to invest in it don’t even consider doing so unless you are an end user who either must have the metal or shut down production. The price of rhodium is posted on a spot basis by Johnson Matthey in London, and there are only a handful of companies that can sell you new metal. ... Sometime in 2001 the selling price for rhodium was around $200 a troy ounce (31.1 grams). This means that the cost of producing an ounce of rhodium was less than $200 in 2001. ... Palladium sold for $1000 per troy ounce at the peak of a 2001 “bubble.” It has never since been above $400 per ounce, and it is said that palladium today may be in surplus by as much as one year’s new production, 6 million ounces still being held by fund managers who over invested in 2001 without an exit strategy for the downturn that occurred. [Idiots!]