Investing in Strategic Metals for Wealth Preservation – Upcoming Conference

roc-topHappy to announce that I will be speaking about opportunities and risks of strategic metal investments as part of wealth preservation strategies at a conference on “Retiring Overseas” in Las Vegas. Date is the 31st of August. Click here for conference details. Hope to see you there!

Platinum Group Metals: staring down a cliff?

TecDay Road to the Future – Drive TrainOne topic of my annual “Metal Megatrends” paper at the recent IPMI conference in Phoenix was sustainable mobility, and its impacts on metal consumption. In fact, if you read the story of how my column for Kitco News started four years ago (see the “Welcome” page of this blog), we have now reached a point where we can answer the question: “What if all cars in the world were electric?”.

The answer is now online on Kitco News (click here to read).

While my paper (available through the IPMI in a little while) was also critical regarding Tesla executives’ role in trash talking hydrogen it should also be disclosed that I am on the long list of people having pre-ordered a Model 3, and I share the admiration of Elon Musk by those who say he is shaping the world by his visions, perhaps in more significant ways than Steve Jobs ever has.

As a result of adding up all the facts in front of us the only logical conclusion is that the era of the internal combustion engine is coming to an end. There will be a long tail, of course, with cars being passed on from some regions of the world to others, and with heavy duty engines as an unresolved issue. What about collector’s cars? Will a “boutique” style infrastructure emerge where we buy fuel in new ways, or is it back to the pharmacy like in the early days of the automobile?

Last but certainly not least: what will happen to pgm markets in the meantime? Assuming that the fuel cell will eventually gain traction, the loss of platinum on emission control catalysts might be offset by the growth of the FCEV. Palladium, which is already used in some fuel cells, might once again play a role as a substitute. Only for rhodium the direction is unclear in this environment.

That said, the unique properties of precious metals have always made them desirable, if not irreplaceable, in technology applications. I am optimistic that new uses will emerge as technologies advance further.

40th Anniversary of the IPMI Conference coming up!

Just a reminder that this year’s conference of the International Precious Metals Institute (IPMI) is less than a month out. It’s a special one, too, the 40th conference of its kind with an excellent program covering all aspects of the industry.

IPMI Conference Poster

I love this event because it is such a unique opportunity to catch up on current topics and trends combined with the opportunity to (re)connect and network with industry executives from around the world. If you need further convincing, the Desert Ridge Resort in Phoenix, Arizona, is a truly spectacular venue.

I will be speaking as the first presenter in Session C at 10:00 am on Sunday morning, June 12, 2016. Session location are the Grand Canyon Ballrooms 9 & 10.

Head over to http://www.ipmi.org for reservations – looking forward to seeing you there!

BYD -disrupting the markets for lithium and cobalt

A few weeks ago, during the hype of hundreds of thousands of Tesla Model 3 pre-orders, I saw a report on BYD (“Build Your Dream”), a Chinese car and battery manufacturer. While Tesla are scrambling to determine how they will meet the large demand they just created, BYD is already producing very large amounts of battery-electric vehicles today. I was drawn to their YouTube video (link below, the Spanish title seems to be an error on their part) in which BYD are demonstrating the safety of their lithium iron phosphate batteries.

These batteries are interesting because they are likely to do two things to metal markets:

  1. They will remove the issue of a cobalt shortage which is imminent – standard Li-ion batteries contain about 10% of cobalt, that’s 50kg per Tesla. Arithmetically, there just isn’t enough cobalt available in the world to prevent a market crash. See my earlier report on the topic here, and an excellent analysis by John Petersen titled “EV batteries and the cobalt cliff” here.
  2. The effect on lithium will be inverse: the metal, unchained from cobalt, can now be used more widespread than previously possible.

BYD-E6_3Intrigued by this scenario, I requested an interview with BYD which was promptly granted. I wish other companies were this forthcoming when it comes to asking about their technology. The resulting article was just published on Kitco News today, and it can be viewed here. Hope you will find it interesting.

Tesla Model 3: the car that is

IMG_20160331_100033

You may feel about Tesla in whichever way you like, but there is no denying that today is the day people will remember as the day when the paradigms of selling cars changed forever. Thousands of people are waiting in line to pay down $1,000 on a car they have never seen, a car that may or may not be shipped in 2017, a car that – according to its creator – doesn’t even exist in its final design yet.

IMG_20160331_095433The picture shows people waiting at a factory owned store in a shopping mall (Short Hills Mall in New Jersey, USA). The line, which security estimated to be at least 200 people, winds throughout the mall and out the door. The line in the other picture shows people waiting for the new iPhone, also released today in what can only be called a marketing blunder. IMG_20160331_095110It is not the Tesla Model 3 other EV manufacturers have to worry about, it’s the way in which Elon Musk and the Tesla brand excite the masses. The Model 3 presale takes thousands of committed EV buyers off the market for at least 4-5 years (1.5 years of waiting time plus a 3 year lease). Whichever product or marketing strategy other brands may come up with, from hereon the market has been captured by Tesla for a very long time. A VERY smart move.

Unlikely Apple or Google will enter the Auto Market – Carlos Ghosn

IMG_5356Carlos Ghosn, CEO of both Renault and Nissan, shared some very relevant insights on why electric vehicles are unstoppable, and why he does not see any of the tech companies enter the automotive market as a producer. Ghosn gave a speech at the opening ceremony and press breakfast of this year’s New York International Auto Show (NYIAS).  My Kitco report (click here to read) focuses on the key aspects, but there was a lot more:

  • Autonomous drive, in his view, is only a milestone since it still requires a driver to hold the wheel, and watch the road. Driver-less cars are the goal the industry is aiming at. The Renault Nissan Alliance will have at least 10 models on the road with “significant” autonomous drive capabilities by 2020.
  • Battery-electric and hydrogen electric are just two sides of the same coin to him. In both cases, infrastructure is lacking, and creating the required infrastructure is the most important role governments and industry will have to play in years to come.
  • The industry is in a complex period of transformation where electronics force car makers into much faster innovation cycles while maintaining safety and quality standards. The focus of the new generation of drivers obtaining their licenses just now will shift from performance to features and convenience.

It was interesting to see how the various manufacturers interpreted the theme at NYIAS, each in their own way. I will put some facts and images together over the weekend to illustrate the scene.

Silver is on its way to shine again

Solar Impulse 2 eighteenth flight

From the early phases of writing my series for Kitco News, silver kept appearing in new and large applications suggesting it might one day reclaim its important industrial role within the precious metals family; a role it had lost after the collapse of silver based photography.

This week’s report for Kitco News picks up on several of the stories I have featured during this time and confirms that silver is indeed back, with more growth yet to come. I hope you will enjoy the story. Please check out the links in the article, too – they may not be easy to spot, depending on the screen you use.

(Image courtesy of Solar Impulse)