CATs Corner – Episode 5

Nick Snyder:
All right. We're here with our esteemed panel. We're here with another episode of CATs Corner. How you guys doing?

Pete Thomas:
We're all good, man. It's always good to see you. It's always good to know that you guys are building the backbone of our nation with copper, and all the other metals we need, too.

Nick Snyder:
We're doing our best. So, what's new in the PGM world? It's been a few weeks since we've done one of these.

Pete Thomas:
It has, and your partner in crime over there, he and I were trading a few emails on LinkedIn, and we have had a very large break from Chinese reserve selling, of tightening a number of things that have influenced this market, in the PGM side. And we saw palladium and platinum, both, really get hit hard.

Nick Snyder:
Yeah.

Pete Thomas:
Copper came in, and really tested that $4 area, which really surprised a lot of people. And we all agreed that it was the place to start stockpiling.

Nick Snyder:
Gotcha. So the PGMs kind of... I mean, copper recovered.

Pete Thomas:
Yes, it did. Nicely, too.

Scott Pollan:
Yeah.

Nick Snyder:
It is very nice, but I mainly want to focus for this, where this thing's going to be posted, on all the PGMs. So we're north of $1,000 on platinum.

Pete Thomas:
Right.

Scott Pollan:
Mm-hmm (affirmative).

Nick Snyder:
We're $24 today. Twenty-

Pete Thomas:
$78, right now; bid on palladium.

Nick Snyder:
Around $16,500, rhodium. Is that what you guys got?

Scott Pollan:
They've got on the 30 day chart here for platinum, you've got a pretty strong ascending ledge. Honing in on that $1,000 value, which we'll reach it, and then, either we'll hit up or down. We'll see what the market has this far.

Pete Thomas:
So people that keep charts will be saying, "Hey, this held areas, it was supposed to hold."

Scott Pollan:
Mm-hmm (affirmative).

Pete Thomas:
As far as we're concerned, net end users and product hedgers, when platinum went under $1,000, and was drifting lower, we were what's referred to as 'palms in'. We were net buyers for individuals that are going to be using the product in the future, for everything from diodes, to cathodes, on up. So we were net purchasers, all the way down, on this last break, Nick.

Nick Snyder:
Gotcha. So what do you guys see how the third quarter's going to turn out? Do you have any projections, any speculations you can share with everybody?

Pete Thomas:
Well first, let's take a look at the new COVID that's spreading, Nick. I think that's very germane to us. Also, the other thing, that all of us have to be aware of, is chips. The chip production is still in the doldrums. They're not getting enough product out. They're running 24/7, but demand is outstripping production.

Nick Snyder:
Well, I read today, that Ford's cutting their production again on-

Pete Thomas:
I'm glad you mentioned that. [crosstalk 00:03:02] Thank you. Absolutely right.

Nick Snyder:
That affects us, right? On the-

Pete Thomas:
Oh, of course it does. It affects you in two ways. One is that the platinum demand is going to be down for AUTOCATs. Number two, they're making less AUTOCATs. I don't know if you know it or not, but they're building trucks, and a lot of times, they're leaving the AUTOCATs and the chips is out, and they're just pushing the bodies over to the side. So-

Nick Snyder:
Got it.

Pete Thomas:
... we're going to have an impact on our market from delays.

Nick Snyder:
Gotcha. Is there a light at the end of the tunnel of those [inaudible 00:03:38]?

Pete Thomas:
Absolutely. As long as China doesn't invade Taiwan, everything's going to be good. And that's a real big 'if' right now. And right now, I'm looking at someone... There's two people I'm talking to, in the United States, talking about building chip plants that will help. But that's a very technical, high scientific endeavor. So it's going to take a little while. They've been at it about six months. They're talking about three more, but it's sort of like when you talk to your computer program. When's it going to be done? Next week. And then, a month later, you're still waiting.

Nick Snyder:
Yeah. Cool. Cool. All right. Well, anything else to share, gentlemen?

Pete Thomas:
Well, I'll tell you what. I want all of your guys to know, that we are of the same mind. We saw, when we were telling all of your people on your show, that we felt that palladium was strong in the $2200, $2300 area. That has not changed. And anytime you get a good break in the platinum, you want to be a net buyer. Anytime you get a real strong rally, I think you're going to see resistance in here, from China and from currency trades. So I think you're going to have a trading market for the next quarter, Nick, and you can buy and sell within those parameters. If you're a hedger, you can mitigate risk at those levels, as well.

Nick Snyder:
Okay. Fantastic. All right. Thank you guys. We'll do this again in a week, and we'll get this out to everybody.

Speaker 4:
Already locked in.

Pete Thomas:
Always a pleasure, man. Anyway, we can help your people, we're glad to do it over at Zaner Metals.

Nick Snyder:
Thanks, everybody.