In the financial, investing, and asset protection world, everyone’s looking for a big tip. The one piece of inside information that everyone thinks is a secret, but might turn into wicked profits. Today, you’re getting that tip – hafnium. Most investors haven’t heard of it and fewer know how to profit. But if you take action now, this might be one tip you take straight to the bank.
Hafnium is a silver gray lustrous metal used in semiconductor fabrication, nuclear reactors, alloys and more. Its high melting point is its greatest strength, and it’s vital in the rapidly growing aerospace industry as a super alloys. The great thing for you as an investor is, there isn’t enough, and the situation’s getting worse. As you’ll read in a moment, even though the price of hafnium hit all time highs in 2014, we haven’t seen anything yet.
Hafnium is a Byproduct of Zirconium
This rare metal does not exist on its own in nature. This is a good thing because it has the habit of spontaneously combusting when it’s exposed to air. Not the type of thing you want shooting from the ground.
It is produced out of zirconium, a metal whose primary use is in the cores of nuclear reactors. This processing is extremely complicated, expensive, and as you’ll see shortly very limited.
That means supplies of hafnium are limited by how much zirconium mines and producers need to sell.
Zirconium Demand Has Declined
Zirconium has a high resistance to heat, so it finds use in several high temperature applications. For example, it’s used as a cladding for nuclear reactors.
However, after the Fukushima disaster, the demand on zirconium dropped. At least temporarily. Even though demand for nuclear applications will rebound, it’s unlikely to grow enough to require increased zirconium production from historical highs.
While it’s also useful in space and aeronautic industries, positron emission tomography cameras, and biomedical applications, these applications don’t generate enough demand to justify increased mining of these minerals. The thin trading of hafnium however means that small demand increases can raise prices significantly.
In a nutshell, if mines increase their output of zirconium, prices would decline and it would not be in the mines best interest to do so.
Reduced mining keeps demand higher and there’s less need for continued mining.
A Huge Amount of Zirconium is needed Just to Get a Drop of Hafnium
For every ton of zirconium produced, we are only able to get between 10-50kg of hafnium. Or, to put it another way, it takes 50 tons of zirconium just to get a ton of hafnium. Moreover, these totals are for all hafnium, so the high quality hafnium needed in aerospace and other technology is even less.
Zirconium miners are primarily interested in zirconium, that’s where their bread and butter comes from, to the tune of 800,000 tons per year. Mining companies can’t exist on the secondary revenue stream of 70-80 tons of hafnium per year.
In addition, even if 70 – 80 tons of hafnium were enough to support mining operations, what would they do with the left over zirconium, when the demand is dropping?
The obvious answer is to slow mining and processing. And that’s been happening for the last few years.
Less Zirconium Means No Hafnium Supply
This has put extreme pressure on existing hafnium stockpiles, and those look to be depleted soon. Manufacturers are already in a position where hafnium is only available on a first come, first served basis, and the price of the metal doubled in 2014. In fact, given the current growing demand, sources predict we could run out of the metal within the decade.
Once those existing stockpiles are gone, the 2014 price, which doubled over the earlier year, will be a steal.
By all appearances, the demand on zirconium may increase as high as previous levels as nuclear demand grows, but it isn’t growing near as fast as hafnium which creates a situation where supply cannot keep up with demand. This creates the perfect storm for skyrocketing prices. Bad for manufactures. But great for smart investors who stockpile these metals now while prices are still low.
To find out more details and see if rare metals makes sense in your portfolio, please click here to talk to a representative.
Hafnium may have a very high melting point. But this metal is such a hot commodity right now; it might be able to melt… itself.