Commodities Megathread

Figured we might as well have a general thread for investing in commodities.

Saw this video today and it’s a pretty good high level view at investing in Nickel.

What commodities are you looking at investing in / already invest in?!

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Mega

Thread

:oil_drum:

:hammer:

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One last one, sorry :ok_hand:

Oil trading at such low prices

Much wow

Goldman’s ex-CEO is not on their Slack channel, obviously:

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I’m most worried about Glencore.

Look at that debt to equity:

Terrible safety standards:

In safety our statistics do not bear comparison with our peers. Although we mine in more difficult locations and have a far larger workforce, our total number of fatalities for the year of 17 is simply unacceptable."

Workers rights battles:


Managers bailing out.

Everything you read about Glasenberg seems like he cba anymore.

Doesn’t seem like we’re a million miles away from that 78p mark and if this rumbles on…

:skull:

Interesting consideration!

Top 5 in this order:

Copper > when this recession bites, there will be opportunities. Supply/demand, and electrification both tailwinds.

Uranium > at the bottom cycle, supply/demand positive, net new reactors coming online next 3 years+. Possible regulatory assistance by US for security reasons.

Silver > silver gold ratio 100:1 is unprecedentedly wide. Gold will pop further due to fear, QE etc…then silver will when gold gets too expensive.

Platinum group metals > big demand from catalytic converters and other industrial applications driven by environmental legislation. Will fill space until electric cars take over.

Nickel > technology tailwind, Norilsk is on watchlist outside Freetrade.

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I’ll be moving into Southern Copper, Norlisk and Newcrest (with a punt in Kefi Minerals) when they’re added to the app.

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To be honest, if Freetrade put the Stocks from TSX exchange on the app, it would be commodity heaven!

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Uranium intrigues me.

Yellow Cake (it’s on Freetrade) share price has never been lower: 152p. The company reported net asset value(NAV) at 211p per share to 31 Dec 2019.

That’s a 28% discount to NAV. It doesn’t mean you’re in for a 28% rally, as the share price may never get there for various reasons, but it’s an interesting data point.

Source:

https://www.proactiveinvestors.co.uk/companies/news/912048/yellow-cake-reports-net-asset-value-per-share-of-211p-for-december-quarter-912048.html

Edit - Just checked in the article, they reported having 9.62m pounds of physical uranium (U3O8). The current spot price is $24 (source), so they have $230.88m worth of U3O8 currently, with 87.99m shares outstanding, that’s $2.62 worth of U3O8 per share, so £2.14.

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SCCO started rebounding today. Couldn’t wait any longer for Freetrade so snapped them up elsewhere last week!

Looks like a really good series from Crux here, especially with commodities really depressed.

This is interesting, can anyone zero in on the benefits of a move like this for me?

Same in UK, I tried to buy silver bullion today. Sold out nearly everywhere in bar format.

Basically People are concerned paper gold and silver (ETFs) etc are not 1:1 backed by physical gold even when they say it is. Also gold and silver held in vaults but controlled by ETFs, funds etc have their physical gold and silver unallocated which means you can’t specifically say which bit is yours.

When people try to sell very fast, it decouples from actual spot price as other factors in share purchase affect price.

Finally any gold or silver held within the bank system can be withheld by government and seconded. US have done this before when they outlawed gold ownership in last century 1933 by Roosevelt.

People willing to pay premium on the spot price to buy physical bars and coins and self store them at home or in their own specified secure vault. In case of complete breakdown in fiat currency, you have your store of value to hand and protecting against devaluation of currency / inflation

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FT:

The aluminium industry is facing a huge supply glut that could trigger thousands of jobs losses as the coronavirus pandemic forces key customers to halt production.

Demand for the lightweight metal, used in everything from cars to drinks cans, will drop 8 per cent this year, reflecting severe lockdowns in the world’s biggest economies, according to consultancy CRU.

Carmakers including Peugeot, Volkswagen and Ford have already cut production at plants in Europe and North America because of quarantine measures and falling demand for new vehicles.

As a result aluminium production could outstrip global consumption by 6m tonnes this year or 4m tonnes if major producers, which include Alcoa and Rio Tinto, move quickly to close smelters.

To put that figure in perspective, the surplus following the global financial crisis a decade ago reached 3.9m tonnes, which the industry took years to digest

“There is going to be a substantial global surplus,” said Eoin Dinsmore, analyst at CRU. “It is going to be impossible to avoid that.”

CRU reckons smelters producing 900,000 tonnes of aluminium annually will be closed in China this year and just over 1m tonnes in the rest of the world. “We expect curtailments from the majors and they will be centred in Europe and Australia,” added Mr Dinsmore.

Aluminium prices have been under pressure since spiking above $2,500 two years ago after the US slapped crippling sanctions on Rusal, the largest producer outside of China.
The metal’s price has ground steadily lower because of weak demand, this week hitting a four-year low below $1,600 a tonne.

Source - https://www.ft.com/content/93ae66a4-1962-4729-8695-49f42a879629

Going to hurt Australians a lot , huge amount of their super in commodity stocks affected so a even bigger hit on top of the across the board market dumps

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