There's Something Happening Here!

Early this morning, Monday, 3/25/19, April Platinum traded as low as $841.5. The market doesn't really know how to make sense of a $1500+ Palladium price and this low Platinum number, and as a result, there has been lots of volatility. 

Metals have traded up since then, with April Platinum at $854.5. As any reader of my Blog and my eBook know, all these moves in the $800s are just noise; Platinum is dramatically mispriced at these levels, but the marketplace doesn't yet understand why. 

The eBook provides lot of detail around the themes of limited supplies, critical uses which generally have no substitutes and the likelihood of even chaotic upward moves in the PGMs as people begin to appreciate the bid that can develop from investors, industrial users for inventory, and strategic buyers. 

This all of course occurs within the context of the massive world money flows; the de facto control I believe Russia has over the PGM market, and the challenges in South Africa around Eskom electricity production and periodic labor strife in that country. The Eskom troubles are now being widely chronicled. 

I find MiningMx.com and Fin24.com to be excellent sources. Fin24, this morning interviewed Andrew Etzinger, Eskom's acting Head of Generation, who noted that "Experience has shown the performance of power stations is not where it should be and is unreliable." While I am sure Eskom is working hard, my view is that there have been many years of deferred maintenance as well as decisions that had political motivation, leaving the utility in a fundamentally challenged state, even as the Government seeks to channel resources to improving things.

Anyway, at the moment, I don't believe the market "gets it!" Just watch what I think will likely happen.  

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