Move over silver & gold, industrial metals are stepping into the spotlight. Both monetary metals saw new highs over the past year as uncertainty loomed.
Now, we’re seeing that fear-induced search for gold and silver be traded out for optimism in industrial metals such as platinum and copper.
For the first time in over six years, platinum surged above $1,300 an ounce.
And this is just the beginning of platinum’s big run.
Demand is continuing to explode while supply side, we’ve seen three consecutive years of supply deficit.
Even last year in 2020, when production slowed down, global platinum saw a deficit of 390,000 ounces.
With emissions standards tightening and car sales beginning to rebound, platinum will continue to be in the spotlight.
Although in recent years platinum has been predominantly used in diesel vehicles, it will be sought after for gasoline vehicles as long as it continues to be available cheaper than palladium and rhodium.
So, what is the best way to make money from this run-up? Today I’m going to give you three.
Anglo American Platinum (ANGPY) is the world’s largest platinum-mining company. Founded in 1995 and based in Johannesburg, it is a subsidiary of UK based mining giant Anglo American (NGLOY). Shares of both Anglo American Platinum, and it’s parent operation can be found as ADR shares on the OTC market.
Shares of the ANGPY are at all time highs of $19, which is up 35% over the past year.
The second largest platinum producer is Impala Platinum (IMPUY). The company is also based in Johannesburg and its ADR trades on the OTC market.
Shares of IMPUY are the highest they have been since 2013, and up 44% over the past year.
Both of these companies produce a range of platinum group metals and are sure to see gains from rising platinum prices.
GraniteShares Platinum Trust (PLTM) has been around since 2018 and is structured as a grantor trust back by physical platinum. This physical platinum is held in a vault in London and is inspected twice per year.
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Since this trust is based on the value of the metal sitting there, here you’re exposed to the platinum spot price minus the fund’s expenses. Shares are up 30% over the past year, clearly taking advantage of the metal’s movement.
iPath Series B Bloomberg Platinum Subindex Total Return ETN (PGM) is a little different spin on tracking the spot price. It has the exact same goal as PLTM in that is wants to track the spot price of platinum.
It is structured as an ETN and invests in futures contracts instead of being backed by physical platinum Shares of PGM are up 26% over the past year.
When it comes to wanting broad exposure of the metals market, my favorite is iShares MSCI Global Metals & Mining Producers ETF (PICK). It has over 200 holdings and provides exposure to companies that are involved in the extraction and production of precious metals, minerals, aluminum and steel.
Not only will you get exposure to 3 of the 5 largest platinum producers, but you’ll essentially get exposure to the global metals market as a whole. Shares are up 43% over the past year and will not only benefit from platinum’s run, but by demand of other industrial metals as well.
There are clearly pros and cons to each above. But one thing is for sure, all of them are sure to see the impact of platinum’s recent run-up.
If you're looking for exposure in this hot metal in 2021, these three plays are a great place to start your research.
To your prosperity and health,
Joshua M. Belanger