Breaking news as of January 22, 2008 on Precious Metals in the Global Market
Reported by Kimberly Birkland
Gold is falling on a speculation of global economic depression which will reduce investment demand for this precious metal. Silver is also declining. "Gold doesn't like economic weakness," said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. "In this environment, you have investors who are selling any asset. The idea is that people will have less money to put into gold (www.bloomberg.com).
Silver futures for March fell 13.5 cents, or .8 percent, to $15.97 an ounce. The metal simultaneously has gained 7 percent this month.
The recession in the U.S. seems to be fueling a lot of the problems with precious metals falling on a global scale. It seems that the world cannot separate itself from what is happening right here in the United States, it affects all metals on a global scale.
Although, platinum may climb to a record $1,750.00 an ounce in the next several months even while there are "continuous problems" in mining the metal in South Africa, the world's biggest producer of platinum, Heraeus Metallhandels GmbH said. The precious metal platinum is used in catalytic converters and jewelry.
Prices rose on platinum 34 percent last year as production declined in South Africa because of accidents and strikes. The metal rose to an all-time high of $1,592.00 on January 14.
Prices have risen almost fourfold in the time that supply has fallen short of demand in seven of the past eight years for platinum. This is according to London-based Johnson Matthey Plc, the world's largest distributor of the metal. This is amidst flooding in the mines, severe storms, and the main mine at Amandelbult is running at approximately 25 percent of its normal output.
Palladium held in London-listed exchange-traded funds managed by ETF Securities ltd. advanced to a record. The total held jumped to 72,560 ounces on Jan. 18, from 46,526 ounces the previous day.
Platinum rose to $1,544 an ounce by morning, "fixing" in London from $1,538 at the previous afternoon fixing.
The burning question is how does this affect business on a global scale? Companies such as Techemet, headquartered in Pasadena, Texas, is taking advantage of this bear market and global recession. They have honed in on an even more stable commodity: catalytic converters. What are all catalytic converters composed of? Platinum, palladium, and rhodium: three of the most precious metals on the market today. Where exactly do these converters go once the car has gone to the dump? They don't stop there. Companies such as Techemet and Acmecatz take catalytic converters and recycle the precious metals out of these complex machines.
The available supply of the Platinum Group Metals (PGMs) that is derived from recycled automotive converters represents a significant and growing portion of new metal each year, metal that will be required to satisfy the increasingly more stringent global emissions standards mandated by broadening global regulations.
Techemet is a smelter and recycler of platinum group metal scrap. Their main function is the recovery of Platinum, Rhodium and Palladium from scrap automobile catalytic converters. Initial work was started in 1987 on their smelter, and full scale production began in 1989. They have grown in capacity and expertise to the point where they are one of the top recyclers of automobile catalysts in the world. Their motto is "innovation is the key to success," and this certainly makes sense where they have taken advantage of a loophole in the process of manufacturing and recycling used car parts. Techemet purchases materials worldwide. For a more in-depth view, please visit their web site at www.techemetz.com.
Another figure is emerging in this recycling of automobile parts for precious metals. They go so far as to using these metals for dental parts. Acme Catz recycles catalytic converters, automotive cores, batteries, and nonferrous metals to extract Gold, Platinum, Palladium, and Rhodium in trace form. These metals can be reused in ways from jewelry to medical and dental instruments.
A-1 Specialized has emerged as the global leader in the recycling of PGMs from salvage catalytic converters and remains an important and active marketer of platinum, palladium and rhodium to meet the needs of its consumers.
The future is yet to be explored in this business. The next question is; where do all those "environmentally friendly" and gas-saving, electric hybrid automobiles go once they are done with? Most likely to the junk yard. Extremist environmentalists think they are doing a world a service with purchasing a hybrid car, when in fact, the very metals that go into making those electric batteries are not only expensive and rare, but use up much more energy into mining and developing, than they save. This is a rare look at a trend that you see nowadays and something to think about the future . . . all of those electric batteries could be salvaged for the precious metals used therein… just food for… um… profit.
Ironically, the emergence of hybrid cars, the necessary advancement of alternative batteries to satisfy the hybrid demands, and worries about the toxicity of hybrid batteries, have re-opened the environmental debate about all car battery technology. "It's providing an opportunity for us to talk about it," said Thomas.
While not nearly as dangerous as lead, nickel is not without some environmental risks, and is considered a probable carcinogen. There are also concerns about the environmental impacts of nickel mining, and apparent challenges with fully recycling the nickel used in hybrid batteries.
Talk in the works… While Honda and Toyota are promising that their batteries come back to them and are recycled, that is not 100% truth. The truth is that the recycling process is complicated, and further measures and research need to be taken to figure the whole process out, and to make sure that these toxic batteries don't end up in landmines and landfills, and eventually, in our water…