Investing In Rare Metals
By-Product Effect: Low price elasticity of supply
The numbers given in this video are estimates only, and are not intended accurately to represent current prices and production volumes.
Base metals such as copper and nickel, and precious metals such as platinum, are directly targeted by mining companies and produced as a primary product, whereas rare metals such as tellurium, cobalt or ruthenium are – for the most part – produced as by-products of the base and precious metals industries.
The by-product nature of the metals in our investment universe, together with rapidly evolving industrial needs, can lead to serious shortages and significant, rapid price movements.
Substitutability: Low price elasticity of demand
If a metal is required for a specific application, then avoiding it would necessarily lead to huge efficiency losses or to an inability to produce that specific tech. Industrial players cannot afford to avoid them.
Below are three instances of physical properties exploited in rare metals. This is by no means an exhaustive list. Ruthenium for example is used not just as a semiconductor in microelectronics, but also as a catalyst in the oil industry, as an anti-corrosion agent in hard drives, and in strengthening titanium alloys… and further applications are constantly being developed for this terrifically versatile metal.