After fifteen years of stagnation, platinum has woken up in a big way with an impressive 36% surge over the past two months. Even more exciting, this bull market may just be beginning.
The only thing I think you have missed is Platinum's use in green energy re Hydrogen.
Platinum is a critical mineral for the energy transition, as it is a key component in making clean hydrogen technologies cost-competitive. Platinum-based proton exchange membrane (PEM) electrolyzes and fuel cells are crucial for unlocking the potential of clean hydrogen.
Demand for platinum in hydrogen applications is expected to grow significantly, potentially accounting for up to 35% of total platinum demand by 2040. However, the limited and inelastic supply of platinum, with over 70% coming from South Africa, poses a challenge to meeting this projected demand.
The high cost and scarcity of platinum have led researchers to explore alternative, non-precious metal catalysts that could potentially replace platinum in hydrogen fuel cells. Alloys of platinum and nickel have shown promise in improving catalytic activity and reducing costs.
Overall, the transition to a hydrogen economy will be heavily dependent on the availability and affordability of platinum, making it a critical material for decarbonization efforts.
Thank you. Actually I did mention platinum's role in hydrogen fuel cell electric vehicles (FCEVs) briefly in the section about industrial platinum demand, but much more could be written about that, of course.
And, yes, it's a very exciting prospect for humanity at large as well as platinum.
Well done Jesse. Very high lease rates and rapidly declining inventories of platinum speak to a setup for a squeeze. There may not be much, if any, pull-back to speak of on the way to a higher price level.
Thank you. You may be right about that and I believe we'll know based on whether platinum can quickly surpass that $1,200 to $1,300 resistance zone I highlighted.
Brilliant analysis as usual! I am seriously considering cancelling ALL of my other paid subscriptions - Jesse' analysis is worth more than all of these other (very well known) analysts put together! Very best wishes, RichardBear
Good morning at 0045 on a Wednesday here in Bay City MI. Can’t sleep so was pleased to see a JC report pop into my inbox.
Thanks for the analysis. I am very bullish on Platinum as well. I’ve had a very small position in $PPLT for a year and on the 1045-1050 breakout I substantially increased it to the point it is now 10.5% of my “energy” portfolio (which consists of shipping, uranium, platinum and oil). It’s now the largest holding in that portfolio. All the others are 2-5%.
I don’t want anything to do with the miners. I don’t understand the business, they are all erratic and I’m sure they would drive me more crazy then the gold and silver miners. At least I understand a little bit about that business, so I’ll stick with my favorite juniors and let them drive me crazy.
And owning physical is not that great an option for us. We live on our boat, as you know. So other than a few Oz of gold and 200oz of silver, we have to vault the rest. The weight and the risk are just not worth trying to save a few hundred dollars a year in storage fees. But, having said that, since the storage fees are based on the value of the metal, I don’t see any reason to add a few platinum bars or coins when I can get the exposure I want through the ETF. I don’t mind paying the storage fees as the value of the holding goes up. But I don’t need to help it go up. Lol.
If I could store all of it myself I might be tempted to buy a couple Oz.
I also think I’d be more tempted to sell the Platinum if the price rose 30-40% and the ETF just makes it easier to do that.
Lastly, I think we will get through the resistance eventually, maybe next year and then go much higher. I’m targeting at least a double from 1050 by end of 2026 with more upside beyond that.
Thx. I don’t know anything about palladium. But I’d be interested in learning. I know Sprott has a combo ETF. And I think $PALL gives exposure maybe to the metal and miners. And I know $SBSW has gotten crushed but might be rising from the dead.
I just checked on my $PPLT holding. It represents 10.3% of what I
Lovingly term my ‘energy’ portfolio. Shipping. Oil. (No Nat Gas see below). Uranium. Platinum. It’s the largest single holding in that mix. Shipping is by far the largest segment, but it spread among 10-12 firms at 1-5% allocations. But overall Platinum is .5% of my total investable NAV.
Nat Gas-I don’t invest. I used to. But 3 years ago I got elected to the Board of a privately held gas and oil streamer, based in Michigan. It’s a long story and my dad actually wrote a book about it. It started out as a friends and family business and for the most part still is. My grandfather was an original investor at least 50 years ago. There are 58 SH and the shares have now passed through 3 generations in our family, 4 generations in some others. We’ve paid over 5 million in dividends over the past 25 years and my brother and I are the 2nd and 3rd largest SH. Cost of capital was zero and we earned 13% based on the share value in 2024. The company owns the mineral rights on about 100 acres in Northern MI and there are 4 oil rigs and 7 gas wells. We used to make a lot more money. But regulations have killed production. The rigs and wells can only operate from 7-7 and ramp up and shutdown takes 60 minutes. So we only get 10 hours of production per day, versus 24 back in the early 2000s when there were years my parents were getting 6k dividend checks every quarter. Now we are lucky to get a 10th of that. But it’s kind of fun to be on a board and it’s certainly free money. The other cool thing is that we have quite a lot of retained earnings in the form of Detroit Edison stock. Some day the wells will run dry or become unprofitable and we will liquidate and cut a check to each SH. At the current share price if we shut down tomorrow my brother and I would each get about 100k. Pretty amazing. Anyway, I figure there is no need for me to risk losing money in a Nat Gas trade since I’m already getting quarterly dividend checks every quarter! And I’ve learned a lot about the business. One of our operators is a silver bug. And he says that the Nat Gas mkt is more manipulated than the silver market.
One last interesting point. On the Nat Gas side they can still make money with gas at $2. Even $1.90. Production costs are low. All the CAPEX was sunk decades ago. And the pipeline runs right through the land so their transport to market cost is zero. Contrast that with some of the newer wells in Texas and elsewhere that need 2.50 or even 3.00 just to break even. Our operator tells us he thinks there is still another 20 years of supply at reasonable production levels for gas and linger for oil. So my kids will hopefully inherit the shares someday. My dad gave my brother and I his shares when he turned 85 and we plan on giving ours away early too. My brother has no kids and I have two so each will get the same number my dad gave to us. More than you needed to know. But it’s a pretty cool story.
Sweet. The attached map of MI shows what are termed the Antrim Shale Deposits. I’m not really sure why they are called that because Antrim County is not actually in the zone. But whatever.
So our company, Baywood Inc owns the mineral rights on about 100 acres smack dab in the middle of the northern zone, and then the mineral rights on about 50 acres in the lower eastern zone in Macomb County.
The guy who started the company was a land developer. He was very successful and built a number of developments in and around SE lower MI in the 60s and 70s. But he got over leveraged and the 70s economy got him and he ended up going bankrupt. The people who had invested in his company were all friends and family and many of them lost a lot of money. My paternal grandpa was one of them. As part of the BR settlement he had to sell all the land he owned, including the northern MI land that he had purchased with the dream of building a retirement and recreation community.
As part of the BR settlement he was able to keep the mineral rights. And a few years later oil was discovered in that northern band. And so he raised a bit of money and found two producers who were willing to explore and drill and eventually begin producing. And once the revenue began flowing he devoted the last 20 years of his life to tracking down all of the people, and the heirs and relatives of the people, who had entrusted him with their money. And he gave them shares in Baywood as his way of trying to make them whole. He did that before the internet and he travelled all over the US and Canada and wrote hundreds of letters and made untold number of phone calls. Today there are 58 SH. Most of us are third generation SH, there are still a couple 2nd generation SH hanging around and a couple 4th generation. Things have gotten very diluted as SH have died and shares were split up and passed on. Last night at our meeting we agreed on a share buyback program so we can try and reduce the # of SH and cut the # of outstanding shares. I’ve been on the board for 5 years. It’s really fun and it’s been a great way to learn about the industry. While getting paid a little bit of money to do it.
Hey thanks. It really is a very cool story. One other little tidbit. The guy who founded the company knew that at some point the gas and oil would run out. But he wrote the bylaws so that dissolving the company was to be considered only as a last resort. Instead, he asked that anyone joining the board do so with an understanding that if the revenue dried up, capital should be spent looking for other types of business opportunities that would continue to provide passive income. And he had some ideas that were ahead of his time. Real estate obviously. But owning plumbing businesss, HVAC, auto repair were all things he mentioned. Private Equity is doing that today (admittedly ruining the businesses but hats for another day). And he encouraged SH and Board members to bring their kids to the annual meeting so they would know all about Baywood and get to know people so that when the kids got the shares someday they would mean more than just a dividend check. I went to probably 15 annual meetings before I became a SH. And he encouraged SH to consider giving their kids some or all of their shares before they died and passed them in a will. But as time has gone and after he died it’s been challenging to prevent the natural dilution. But now we have a plan and have committed 200k to try and buybacks shares and get back to having a smaller group of SH. We will see how it works. My belief is that a lot of people who have small lots, 1000-3000 shares will gladly take 1.50 per share, versus 120- 360 yearly dividend.
Excellent as usual Jesse.
The only thing I think you have missed is Platinum's use in green energy re Hydrogen.
Platinum is a critical mineral for the energy transition, as it is a key component in making clean hydrogen technologies cost-competitive. Platinum-based proton exchange membrane (PEM) electrolyzes and fuel cells are crucial for unlocking the potential of clean hydrogen.
Demand for platinum in hydrogen applications is expected to grow significantly, potentially accounting for up to 35% of total platinum demand by 2040. However, the limited and inelastic supply of platinum, with over 70% coming from South Africa, poses a challenge to meeting this projected demand.
The high cost and scarcity of platinum have led researchers to explore alternative, non-precious metal catalysts that could potentially replace platinum in hydrogen fuel cells. Alloys of platinum and nickel have shown promise in improving catalytic activity and reducing costs.
Overall, the transition to a hydrogen economy will be heavily dependent on the availability and affordability of platinum, making it a critical material for decarbonization efforts.
Lowercosta.com
Thank you. Actually I did mention platinum's role in hydrogen fuel cell electric vehicles (FCEVs) briefly in the section about industrial platinum demand, but much more could be written about that, of course.
And, yes, it's a very exciting prospect for humanity at large as well as platinum.
Well done Jesse. Very high lease rates and rapidly declining inventories of platinum speak to a setup for a squeeze. There may not be much, if any, pull-back to speak of on the way to a higher price level.
Thank you. You may be right about that and I believe we'll know based on whether platinum can quickly surpass that $1,200 to $1,300 resistance zone I highlighted.
This is a fascinating and exciting development!
Thanks Jesse, this is timely with the recent moves. I appreciate you branching out into a new metal!
My pleasure! I am also planning to write a similar report about palladium in the next couple days.
How do we invest in Platinum?
I explained how toward the end of the report.
Thanks Jesse!!
My pleasure!
Brilliant analysis as usual! I am seriously considering cancelling ALL of my other paid subscriptions - Jesse' analysis is worth more than all of these other (very well known) analysts put together! Very best wishes, RichardBear
Thank you so much, Richard! You are too kind :)
Good morning at 0045 on a Wednesday here in Bay City MI. Can’t sleep so was pleased to see a JC report pop into my inbox.
Thanks for the analysis. I am very bullish on Platinum as well. I’ve had a very small position in $PPLT for a year and on the 1045-1050 breakout I substantially increased it to the point it is now 10.5% of my “energy” portfolio (which consists of shipping, uranium, platinum and oil). It’s now the largest holding in that portfolio. All the others are 2-5%.
I don’t want anything to do with the miners. I don’t understand the business, they are all erratic and I’m sure they would drive me more crazy then the gold and silver miners. At least I understand a little bit about that business, so I’ll stick with my favorite juniors and let them drive me crazy.
And owning physical is not that great an option for us. We live on our boat, as you know. So other than a few Oz of gold and 200oz of silver, we have to vault the rest. The weight and the risk are just not worth trying to save a few hundred dollars a year in storage fees. But, having said that, since the storage fees are based on the value of the metal, I don’t see any reason to add a few platinum bars or coins when I can get the exposure I want through the ETF. I don’t mind paying the storage fees as the value of the holding goes up. But I don’t need to help it go up. Lol.
If I could store all of it myself I might be tempted to buy a couple Oz.
I also think I’d be more tempted to sell the Platinum if the price rose 30-40% and the ETF just makes it easier to do that.
Lastly, I think we will get through the resistance eventually, maybe next year and then go much higher. I’m targeting at least a double from 1050 by end of 2026 with more upside beyond that.
Thx. I don’t know anything about palladium. But I’d be interested in learning. I know Sprott has a combo ETF. And I think $PALL gives exposure maybe to the metal and miners. And I know $SBSW has gotten crushed but might be rising from the dead.
My pleasure! I'm glad to hear that.
Sure - I completely understand the convenience of ETFs and it shouldn't be a problem as a relatively small holding in a portfolio.
Yes, I think a double is easily in the cards for platinum even simply due to valuations coming back in-line with historic norms.
Are you bullish or interested in palladium as well? I'm hoping to write a report about that in the next couple days as well.
I just checked on my $PPLT holding. It represents 10.3% of what I
Lovingly term my ‘energy’ portfolio. Shipping. Oil. (No Nat Gas see below). Uranium. Platinum. It’s the largest single holding in that mix. Shipping is by far the largest segment, but it spread among 10-12 firms at 1-5% allocations. But overall Platinum is .5% of my total investable NAV.
Nat Gas-I don’t invest. I used to. But 3 years ago I got elected to the Board of a privately held gas and oil streamer, based in Michigan. It’s a long story and my dad actually wrote a book about it. It started out as a friends and family business and for the most part still is. My grandfather was an original investor at least 50 years ago. There are 58 SH and the shares have now passed through 3 generations in our family, 4 generations in some others. We’ve paid over 5 million in dividends over the past 25 years and my brother and I are the 2nd and 3rd largest SH. Cost of capital was zero and we earned 13% based on the share value in 2024. The company owns the mineral rights on about 100 acres in Northern MI and there are 4 oil rigs and 7 gas wells. We used to make a lot more money. But regulations have killed production. The rigs and wells can only operate from 7-7 and ramp up and shutdown takes 60 minutes. So we only get 10 hours of production per day, versus 24 back in the early 2000s when there were years my parents were getting 6k dividend checks every quarter. Now we are lucky to get a 10th of that. But it’s kind of fun to be on a board and it’s certainly free money. The other cool thing is that we have quite a lot of retained earnings in the form of Detroit Edison stock. Some day the wells will run dry or become unprofitable and we will liquidate and cut a check to each SH. At the current share price if we shut down tomorrow my brother and I would each get about 100k. Pretty amazing. Anyway, I figure there is no need for me to risk losing money in a Nat Gas trade since I’m already getting quarterly dividend checks every quarter! And I’ve learned a lot about the business. One of our operators is a silver bug. And he says that the Nat Gas mkt is more manipulated than the silver market.
One last interesting point. On the Nat Gas side they can still make money with gas at $2. Even $1.90. Production costs are low. All the CAPEX was sunk decades ago. And the pipeline runs right through the land so their transport to market cost is zero. Contrast that with some of the newer wells in Texas and elsewhere that need 2.50 or even 3.00 just to break even. Our operator tells us he thinks there is still another 20 years of supply at reasonable production levels for gas and linger for oil. So my kids will hopefully inherit the shares someday. My dad gave my brother and I his shares when he turned 85 and we plan on giving ours away early too. My brother has no kids and I have two so each will get the same number my dad gave to us. More than you needed to know. But it’s a pretty cool story.
Great story! Thanks for sharing.
I'm currently in East Texas near a gigantic oil and gas field and checking out various wells:
https://x.com/TheBubbleBubble/status/1931018045385744621
https://project.geo.msu.edu/geogmich/oil&gas.html
Sweet. The attached map of MI shows what are termed the Antrim Shale Deposits. I’m not really sure why they are called that because Antrim County is not actually in the zone. But whatever.
So our company, Baywood Inc owns the mineral rights on about 100 acres smack dab in the middle of the northern zone, and then the mineral rights on about 50 acres in the lower eastern zone in Macomb County.
The guy who started the company was a land developer. He was very successful and built a number of developments in and around SE lower MI in the 60s and 70s. But he got over leveraged and the 70s economy got him and he ended up going bankrupt. The people who had invested in his company were all friends and family and many of them lost a lot of money. My paternal grandpa was one of them. As part of the BR settlement he had to sell all the land he owned, including the northern MI land that he had purchased with the dream of building a retirement and recreation community.
As part of the BR settlement he was able to keep the mineral rights. And a few years later oil was discovered in that northern band. And so he raised a bit of money and found two producers who were willing to explore and drill and eventually begin producing. And once the revenue began flowing he devoted the last 20 years of his life to tracking down all of the people, and the heirs and relatives of the people, who had entrusted him with their money. And he gave them shares in Baywood as his way of trying to make them whole. He did that before the internet and he travelled all over the US and Canada and wrote hundreds of letters and made untold number of phone calls. Today there are 58 SH. Most of us are third generation SH, there are still a couple 2nd generation SH hanging around and a couple 4th generation. Things have gotten very diluted as SH have died and shares were split up and passed on. Last night at our meeting we agreed on a share buyback program so we can try and reduce the # of SH and cut the # of outstanding shares. I’ve been on the board for 5 years. It’s really fun and it’s been a great way to learn about the industry. While getting paid a little bit of money to do it.
That's a fascinating story! I feel like it could be made into a movie. Haha.
And it's even better that it provides some passive income.
Hey thanks. It really is a very cool story. One other little tidbit. The guy who founded the company knew that at some point the gas and oil would run out. But he wrote the bylaws so that dissolving the company was to be considered only as a last resort. Instead, he asked that anyone joining the board do so with an understanding that if the revenue dried up, capital should be spent looking for other types of business opportunities that would continue to provide passive income. And he had some ideas that were ahead of his time. Real estate obviously. But owning plumbing businesss, HVAC, auto repair were all things he mentioned. Private Equity is doing that today (admittedly ruining the businesses but hats for another day). And he encouraged SH and Board members to bring their kids to the annual meeting so they would know all about Baywood and get to know people so that when the kids got the shares someday they would mean more than just a dividend check. I went to probably 15 annual meetings before I became a SH. And he encouraged SH to consider giving their kids some or all of their shares before they died and passed them in a will. But as time has gone and after he died it’s been challenging to prevent the natural dilution. But now we have a plan and have committed 200k to try and buybacks shares and get back to having a smaller group of SH. We will see how it works. My belief is that a lot of people who have small lots, 1000-3000 shares will gladly take 1.50 per share, versus 120- 360 yearly dividend.