The price of strategic metals is driven by its demand and supply alone. Market participants are exclusively the producers, specialized dealers (like our partner TRADIUM GmbH, Frankfurt, Germany) and the processing industry who use them.
This is where they differ from exchange traded precious and industry metals (like gold and iron) and other commodities (like oil or cacao) which normally do not physically belong to the investor. Hence the value of strategic metals is not dependent on the volatile movements of the stock market.
Where the price of gold and silver is very much a “perceived value” (as store of wealth), technology metals and rare earth metals have a “real value” based on the price the processing industry is paying for them.
Strong and Growing Demand
Look at your daily life and it is clear to see that the demand for high-tech products continues to grow. Governments around the world pushing green energy, defense or nationwide high-speed internet agendas also contribute to the increasing demand for these strategic raw materials.
Combine this with the ever-growing world population and the transformation of many emerging countries into prospering industrial nations, and it is clear to see the advantages of acquiring strategic metals as permanent tangible assets.
Raw material resources on our planet are finite. However, contrary to what their name might suggest, rare earth elements and technology metals are not actually “rare” … or at least, not exactly. On average, they are about as common as copper or nickel in the earth’s crust. But unlike copper or nickel, they do not occur in mineable pockets, meaning that obtaining them is not physically or economically viable.
To date, just a few countries have been able to mine them and China very much dominates the market since the 1990’s. In fact, China currently supplies about 80% of the world’s technology metals and rare earth elements. Furthermore, they are establishing strategic raw materials reserves and have even started using them as bargaining chips in their trade negotiations (aka trade war) with the US. With no end to these policies in sight, this is putting further strain on the global supply.
One does not have to be an economics graduate to realize that the growing and continued demand for these technology metals and rare earth elements, combined with their limited supply, should lead to an increase in their prices. Since most companies cannot afford to invest in significant inventories of strategic metals this has created an interesting opportunity for smart investors.
The market for strategic metals is very liquid as they are needed as raw material in the production of so many of today’s high-tech products and industries. I.e. unlike precious metals, strategic metals are actually consumed.
Our partner TRADIUM has been buying and selling technology metals and rare earth elements for over two decades. The range offered to retail investors is therefore tailored to the current requirements of the market (i.e. those high in demand).
These metals and powders are industry standard and are not perishable. Furthermore, when using our bank-level secure partner storage facility, they remain in their original packaging. This guarantees a high level of liquidity should you wish to sell your investment.
Unlike liquidating other so-called “inflation proof” investments like real estate (which can take many months), your strategic metal investments can be capitalized within days. Most investors see this as a long-term play of 5 to 10 years. Similar to forestry, if the market is not offering a satisfactory price one can hold off and wait until the pricing is better. Should you want to liquidate, our partner TRADIUM will make you an offer at current market price upon request. Your metals will then be available to the industry again.