Have had 50 tweets the past few weeks on the remarkable state of the platinum group metal (pgm) market. Lots of commentary on rhodium’s $8000 per ounce price and palladium’s $2150 as foreshadowing big moves in platinum and indeed continued upside, becoming explosive in all of the pgms.
While its not complicated, few seem to grasp the nature of this challenge. Production is small and can’t be easily increased and inventory is low. Meanwhile there are no substitutes for the pgms and their uses are critical throughout a modern economy. That doesn’t even factor in new uses that always come down the pike. Indeed owning pgms is owning an option on innovation.
The market has absolutely no perspective on how small and critical these elements are and of the coming onslaught of investor money as well as panicked industrial and strategic inventory acquisition.
I’m invested throughout the space but think Sibanye Stillwater, SBGL, which is my largest position is both the most levered and the most conservative vehicle.