Huge Opportunity in Platinum's Overcorrection

The price of platinum is completely out of kilter by historical and production standards which is not sustainable. Platinum is trading so low right now that it is near the industry average all-in-mining cost to pull it out of the ground, which is $830 an ounce.

Unprofitable mines continue to shut down. The need for platinum is urgent, so the price will have to come up as the supply squeeze becomes more pronounced. And that means huge opportunities for those willing to reach out and grab it!

In a nutshell:

• A metal as beautiful and useful as platinum should be selling at 20-40% MORE than gold, not 20-40% less.
• Industrial demand for platinum is going UP.
• As the price continues below mining profitability, supply is being squeezed down.
• The miners and investors who stick with platinum through this rough patch will be rewarded handsomely when price comes into balance.

Platinum is a strategic metal, meaning it’s used in missiles, bombs and electronics. But there’s an even greater demand which will send the price of platinum soaring.

Platinum is a key component of catalytic converters in autos and manufacturing. Catalytic converters purify exhaust to reduce pollution. They do this using the purifying powers of precious metals, especially platinum. Catalytic converters for automobiles typically have something like $1000-3000 worth of precious metals per car. Huge industrial manufacturing catalytic converters can have hundreds of thousands of dollars’ worth of platinum.

As emissions standards go up, the need for platinum goes up.

As manufacturing increases, the need for platinum goes way up.

As more cars are made, the need for precious metals goes skyward.

Global Drivers of Platinum Price

Europe and China have increased regulation of emissions dramatically this year. Europe is cracking down dramatically following the Volkswagen scandal, and China is finally getting serious about their growing pollution problem.

Since the beginning of this year China is requiring ALL diesel vehicles to have catalytic converters!  THIS IS HUGE!  China is the world’s largest market that uses diesel engines, and this is a brand new requirement as of this year. It will put tremendous demand on the metal in the next 3-5 years as more of those cars come out of the plants.

If you believe that all of these things – emissions standards, manufacturing and auto sales – are going up, then you must understand that the need for platinum will soon outstrip supply if mines close down.

Consider that the world’s largest producer, South Africa, which produces 71% of the world’s production, today has an average production price of $950 an ounce.  This means that over 60% of the platinum mines in South Africa are UNPROFITABLE at today’s price.  Worse yet, one of South Africa’s largest platinum mines, Impala, has a production cost OVER $1300 an ounce!  That’s over 45% higher than platinum is trading at today.

For obvious reasons mines have begun to slow production or shut down which has caused a supply deficit of 20% so far this year.  The last time a deficit like this happened was in 2002 when platinum traded for $550 an ounce, then skyrocketed to over $2000 an ounce within a few years.

This imbalance spells opportunity for savvy precious metals investors! Grab some platinum at today’s cheap prices and watch as the dynamics we have presented play out! Call us today to add this strategic precious metal to your portfolio.