Platinum Spot Price Is Below Its Production Cost

As vonigohcr states, recycling is a factor. In the United States, the majority of platinum "production" is actually sourced from recycling. The cost of producing raw platinum from recycling is presumably cheaper than that of mining. Thus if demand is low enough, demand can be fully met through recycled material rather and new production is unneeded resulting in a price that can be significantly lower than the mining cost. This can lead to a severe price spike in the future as if the price remains under the mining cost long enough, the mines will cease production leading to little flexibility in the supply should demand suddenly increase (as it takes time to put decommissioned mines back into operation).
https://web.archive.org/web/20170807223349/https://minerals.usgs.gov/minerals/...17-plati.pdf

There isn't a single "cost of mining platinum".

First, as others state above, not all platinum sources are equal - just as not all gold sources are equal. It's much cheaper to suck up nuggets from a shallow seafloor than dig a 2 km deep open pit mine, for example. Further, different countries will have different costs; it's much cheaper to hire miners in poor third-world dictatorships than in rich, highly unionized countries.

Second, platinum is rarely mined all by itself. It isn't even usually the primary reason for a mine's existence; it's usually produced as a profitable by-product of nickel or copper refining, a nice little side-earner rather than the core business of a company. If it becomes unprofitable for a specific company to reprocess their waste material to extract the platinum, then they'll simply stop doing it. But they'll keep mining for nickel or copper or whatever, so no miners will go belly-up.

I bought the dip and lowered the cost of my Platinum ETF to about $786/oz spot.

At current spot of $783/oz, it is never too late to start a position on Platinum; considering the price at 14-yr low and way below cost of mining.

JMHO

Platinum spot at $818, as I am typing.

Continue to hold my Platinum ETF shares, more upside ahead.

To state the obvious, until the last few years platinum was usually around $300 or more an oz. spot over gold. Now that platinum is basically being priced as the junk metal over gold and palladium, it sure was a surprise to me. Remember when platinum was $1,900 an oz? And palladium was the junker of the three, lowest of the low (save for silver)?

Does not bother me a bit. Yes, I read and understand the reasons (or guesses) as to why this is. However, despite all of that, I remain convinced that these days that platinum is severely underpriced and that this would be an excellent time to pick up platinum. My crystal ball reveals to me that platinum will, some day, be back up to its old highs and beyond.

Not that I am a genius when it comes to investing in precious metals. I am still waiting for all those ads and opinion pieces that predicts $10,000 an oz. for gold to become true.

I feel sorry for the folks that bought rhodium on its climb up to $10,000 an oz. a few years ago. Can you imagine having bought a lot of it at say 8 or 9 thousand an oz. on its climb, figuring you would ride the upwave to who knows where? Then it dropped like a rock almost faster than you could run to sell it.

If so, you can't sell it without taking a severe loss and all your rhodium might as well be buried in the pyramids for all the good it is going for you or will do for you... at least right now. sad. With that being said, rhodium is currently enjoying highs it has not seen for years.

mike