6
The winners and losers in commodities
This final note today, a word on commodities as we leave 2010 in the rear view mirror.
From blogger and occasional commentator on this program Paul Kedrosky, some performance figures for selected commodities last year: Oil -- not bad -- up 14 percent. Orange juice, up 29 percent. Natural gas was the big loser. Down 20 percent.
The winner? Palladium, up a whopping 95 percent.
What's that, you ask? It's one of those rare earth metals we've been telling you about, the kind China's not exporting anymore.
Journalists love to complain about the sorry state of science education among today's students, but then they reveal their own ignorance in stories like this one. Not knowing where Palladium is located on the Periodic Table is like not knowing where Thailand is on a world map.
Not only is palladium NOT a rare earth, its price increase of 95% pales in comparison with the rare earths over the calendar year 2010. Check out neodymium, dysprosium and europium (which are all truly rare earths, though arguably not "commodities") These are up somewhere in the range of 300 to 500% for 2010.
Palladium IS NOT a rare earth metal! Although an important element, its useful chemical and chemical differ greatly from rare earth (or lanthanide) metals.
Palladium is in the middle of a group of light platinum metals which in turn is in the middle of a group of (second transition) elements. It is used for many of the same reasons the more expensive heavy platinum metals are used; inertness, catalysis.
Rare earth elements are also useful but for different reasons. Each has chemical properties as the others. That makes them difficult to separate. Their physical properties change from one to another as their atomic numbers increase. This is especially true of optical and magnetic properties that depend strongly on the number of unpaired electrons in orbit around the atomic nuclei.
From what I heard, China is threatening to cut off rare earth sales. That certainly could affect cost of magnets used in rotors and hard drives. It can affect the cost of phosphors now required for LEDs and lasers.
At one time there was a strong domestic rare earth extraction industry. I remember buying shares in the late Lindsay Chemical Company, If you get a chance, I surely would be interested in the history of rare earth business in the USA. I think that the Trona Chemical company is still selling cerium dioxide for polishing optics.
