Vehicle Sales Vs. Autocatalyst Demand (Platinum/Palladium/Rhodium)

Vehicles need autocatalysts like rhodium/palladium/platinum. China is increasingly using more of these PGM's in their vehicles.

Chinese vehicle sales:

U.S. vehicle sales: 

Wallstreetbets Pushes SLV To Record High

Wallstreetbets has ignited a buying frenzy in the SLV trust pushing the amount of ounces in the trust to a record high. 

Physical silver ounces held hits record high

The silver price should be going up together with the amount of physical silver ounces held.

Iron Ore Vs. Floor Space Under Construction China

Iron ore is correlated to China construction.

 

Floor space under construction by property developers in China. 

All the construction data for China can be found here.

https://www.ceicdata.com/en/china/commodity-building-floor-space-under-construction-monthly

China steel production data needs to be monitored.

Sibanye-Stillwater

Platinum, palladium and rhodium have all been moving higher and I expect them to go higher as China is loading more palladium and rhodium in their vehicles. China vehicle sales have rebounded as well.

Both palladium and rhodium are in deficit.

Platinum is going to be used in 3-way catalysts, which will boost platinum prices. Sibanye-Stillwater expects platinum to reach $2000 per ounce in 2025.

Sibanye-Stillwater has exposure to all of these metals.

SBSW's production numbers were very good.

SBSW's EBITDA was $922 million in Q3 2020. This translates to $3.7 billion EBITDA per year. With a 5 multiple, SBSW should be valued at $18 billion market cap. So there is 50% upside. The company has no net debt.

Net earnings were $1 billion per year in 2020, but is expected to rise 66% on higher rhodium/platinum prices and higher production numbers. Earnings per share are expected to be at $3.52 per share, which gives Sibanye-Stillwater a P/E of 4.8 which is very cheap.

On top of this, SBSW is expected to offer a dividend yield of 8% and is also moving into the battery metal space.

Price to book value is a bit high at 4.

But price to earnings ratio is ok at 5-7.

Iron Ore

China's iron ore production is not growing.

This is because costs of production are very high in China.

China is the largest iron ore consumer and iron ore imports are growing.

China iron ore imports hit a record in 2020.

Iron ore demand is going to grow.

Iron ore is currently in deficit.

Brazil and Australia have the largest iron ore reserves.

Therefore Vale is a good investment.

Seasonality of Commodities

Commodities should be bought during seasonally strong periods.

Oil

Natural Gas

Uranium

Lead

Nickel

Copper

Zinc

Aluminium

Precious metal price seasonality

Gold

Silver

Palladium

Platinum

Agricultural price seasonality

Soybeans

Sugar

Cotton

Cocoa

Coffee

Corn

Wheat

Lumber

Airline Travel TSA throughput is down

 

China Power Consumption is Growing

China power consumption hit a high of 8.8% in December 2020.

GDP was up 6.5%.

Platinum to reach $2000/ounce

According to Sibanye, platinum will reach $2000/ounce in 5 years. 

COFER Q3 2020: USD Losing Status

The USD lost some of its reserve currency status.

 

Copper Vs. Iron Ore

Copper is a leading indicator for iron ore.

Product Supplied of Petroleum Products Vs. Oil Demand

EIA uses WPSR estimates of product supplied as a proxy for consumption because it measures the removal of petroleum products from the primary supply chain for ultimate delivery to consumers.

Starting in 2021 we see a large decrease in product supplied. This could mean that demand is slowing for petroleum products.