Nick Snyder, Aaron Young of Converter Reclaim, and Pete Thomas - VP of Zaner Precious Metals.

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Nick Snyder:
All right. Welcome, everybody. We're here with another Cats Corner. I got a new guest, our very own Aaron Young. Aaron, take a minute or two and introduce yourself to everybody.

Aaron Young:
Yeah. Hey, my name is Aaron Young, and I am the national sales director for Converter Reclaim. Happy to be here. I'm very green, so I'm going to sit back, listen, maybe ask some hilarious questions, but excited to be here. Thanks, Nick.

Nick Snyder:
Yeah. Thank you. Thank you, Aaron. Thank you, Pete. And let's dive into it, man. I mean, we see platinum. I mean, it's under a thousand now, Pete.

Pete Thomas:
Yup.

Nick Snyder:
I don't like that. Palladium, none of them are looking real strong. You got any thoughts on what's going on?

Pete Thomas:
Well, I was sitting there last night waiting for the palladium to follow, what we referred to as a sympathetic break in the precious metals. No way, it was actually at $1.14 higher while gold was down 60 or 70 bucks, so a whole lot of people were thinking the same thing I was. As far as platinum goes, the fundamentals just keep getting stronger, guys. If China wants to continue to sell $4 billion at a crack end of the market and break this market down [crosstalk 00:01:20].

Nick Snyder:
What did they sell? Did they sell platinum? What did China sell?

Pete Thomas:
No, gold. They came after gold with a vengeance last night. And it was not pretty. But at one point we're down 60, 70, and next thing we've rallied 50. I haven't seen trade like this since the seventies. It's been radical, to say the least.

Nick Snyder:
Do we typically see, I'm thinking of more like your base metals. If you see copper take a shit, a lot of times you see everything else kind of follow. They all kind of follow each other. But not always, that's not always the case. So I didn't know if the PGMs follow gold, or if they are on their own kind of spectrum where they just do their own separate thing. Do you have a thought on that?

Pete Thomas:
Nick, it's a really great question. Let's look at base metals. All right. I mean, we'll see zinc, steel, iron, things of that nature, all of a sudden they'll just get strong. So I just flip over and look at the dollar and see what the dollar is doing. And if all of a sudden the dollar is sinking, it's cheaper to buy product. So people will be coming in buying product, and you'll see a rally in usage. I think right now, you're seeing a bit of a sell off in there because, quite frankly, this bill has just been dragging on and on, and the infrastructure is just, it's gotten so bogged down, and all of a sudden [crosstalk 00:02:47].

Nick Snyder:
Are you talking about the infrastructure bill dragging on?

Pete Thomas:
Yeah.

Nick Snyder:
Okay.

Pete Thomas:
Yeah. It's horrible. Nothing's getting done.

Nick Snyder:
Once this all gets done?

Pete Thomas:
Everybody's talking about stuff.

Nick Snyder:
If it gets done, what happens to the platinum, palladium, rhodium markets?

Pete Thomas:
Well, I believe the biggest thing on platinum, palladium is going to be hydrogen. And I think hydrogen is going to drive this market all the way out to 2030. And I think, let me give you guys... Okay, here's the new anacronym, excuse me. But we all have to live with them. PEMFC, that's going to be proton exchange membrane fuel cells. That's what we're going to be trading, guys. And so get used to hearing that because we're going to be repeating it a lot.

Nick Snyder:
Are those in the hydrogen cars? Is that what they are?

Pete Thomas:
That is exactly right? It's the membrane that the exchange takes place in, when we convert the hydrogen to drive it into the engine to push the motor.

Nick Snyder:
Do they look like a catalytic converter? What do they look like?

Pete Thomas:
They kind of do, actually. I'll try to get a picture for the next show so everybody can get a look at it. Because right now, there's 18 countries, not companies, 18 nations. And for example, Germany just spent 7.3 to 7.9 billion euros getting their hydrogen together. They're talking about 10 million tons of hydrogen usage by 2030. So it's getting real serious out there, when we have nations stepping up throwing a billion here, a billion there and start stockpiling product in order to run it in catalytic converters.

Pete Thomas:
I think platinum is going to be in big demand. And if you didn't buy it on a lot of these breaks, and you have to come to the market, it's going to be expensive. Our guys, our scrappers, what you guys are doing, Nick, it's so important for this nation that people don't realize, is all you guys that are jamming gears out there, pay attention. We're going to be drifting away from catalytic converters over the next five or six years. And we're going to be going into these new type of converters.

Pete Thomas:
And what I want you to think about is, and I wrote this down because it's real important, because I got this from the World Palladium Institute. The World Palladium Investment Council, probably the most reliable stats published out there. And they said right now, basically on a cat, you guys are seeing a recovery of about five grams, at the most for a cat. They're talking about the new catalytic converter holds 50 grams of platinum.

Nick Snyder:
Wow.

Pete Thomas:
I mean, this is a real significant consumption point. And it becomes a matter of, can somebody figure out a way to get a substitute? Right now, it doesn't look like it. There's a lot of research going on in it, but it looks like platinum is going to be the place to be. And our end, the recovery end, we're going to make a heck of a lot more money. It's going to be a real good thing for all of us.

Nick Snyder:
Well, cool. Well, I appreciate your insight.

Pete Thomas:
Sure.

Nick Snyder:
You have any questions, Aaron, any questions for Pete?

Aaron Young:
Not off the top of my mind. It's fascinating to sit and listen.

Nick Snyder:
And that's why it's going to be great for you to be part of this, to kind of just dive in and learn about why these markets are doing what they do.

Aaron Young:
Yeah, of course.

Nick Snyder:
And that's where Pete comes in with some interesting insight. He knows about like, mines going on strike, mines shutting down, people setting water trucks and mines on fire. He's got a bunch of insight and intel that we're not really privy to over here. I mean, all we can do, we're scrap core buyers.

Pete Thomas:
Sure you are.

Nick Snyder:
We buy it off the current market. We try not to speculate. We try not to get into that, but we like to be educated on why it does it, so we can share it with people. So when it does go down or go up, we can be like, "Hey, right now we're thinking it's going, it's not really doing much because everyone's sitting on their heels maybe because of the infrastructure bill." That's what I feel like it is.

Pete Thomas:
And consumption too right now, Nick. I mean, think about it this way, we use a lot of PGMs in cars. And in EV cars, we use 120 pounds of copper, instead of using seven chips in a car, they might use 14 because-

Nick Snyder:
Well, I read an article this morning about, there's been six derailments in like 90 days on the Ford line. Have you seen that?

Pete Thomas:
No, I didn't see that.

Nick Snyder:
Six. So to top it off, they can't get the semi-conductors. They can't get these plants the chips to make these cars, which would use the catalytic converters. And to top it off, for some reason, there's been multiple derailments of the vehicles themselves.

Pete Thomas:
That's interesting.

Nick Snyder:
So then they'd be wrecking them. I saw that article this morning on LinkedIn. So just-

Pete Thomas:
Last week I split a pizza with a guy. All of our guys, when they fly into Chicago, Nick, we always take them out for Chicago pizza because they always want. So I sat down with a guy that owned railroad, and we sat and talked about shipping and the effects of what's going on. And he told me, point blank. He said, "We've got so much product to ship right now that it's literally slowing us down because we're having to make longer cars, longer trains in order to deliver." And he goes, "You could only fit a certain size on a rail." So he said, "We're just backed up." And he goes, "Listen." He goes, "I don't mind having this problem of too much product to ship." He goes, "We're doing real well. But in the meantime it's been very difficult." So this was from a guy that owned the company and owned the railroad. So input was not good.

Nick Snyder:
Gotcha. Okay. Well, I think I'll wrap it up. We'll do this again in a week.

Pete Thomas:
Yup.

Nick Snyder:
And we'll keep building this out and just educating everybody. All right. Thanks, everybody. Everyone have a-

Pete Thomas:
I'll try to get you a picture of membranes. I'll try to get you a little flow, so that [crosstalk 00:09:42].

Nick Snyder:
Yeah. If you could send that today, we'll put it in this. We'll overlay it in here.

Pete Thomas:
Oh, okay, great. Great. Absolutely.

Nick Snyder:
Awesome. All right. Thanks, everybody. Have a great week.

Pete Thomas:
Nice meeting you, Aaron.

Aaron Young:
See you later. You too.

Pete Thomas:
All right, man.