Category — Commodities

The Commodities Bull Market: Insights on Energy and Agriculture
By Peter Krauth, Global Resources Specialist, Money Morning (USA)

Despite the setback caused by the 2008 financial crisis, the commodities bull market rolls on. A short four years later, many commodities are trading at or near all-time highs.

And thanks to huge swaths of the developing world moving up the ranks, the current bull market in commodities promises to be one for the history books– both in time and size.

After all, the wants and needs of 7 billion people are an irresistible and monumental force.

Soon virtually every substance vital to modern life will become enormously expensive ? and profitable for investors who know how to play it.

In fact, today’s scarcity and soaring costs could spur history’s biggest gains. [Read more →]

Apple Inc. (Nasdaq: AAPL) loves to think of lucrative new uses for other people’s bright ideas.

For instance, the original iPod wouldn’t have been possible without Toshiba’s innovative 1.8-inch hard drive.

And when Steve Jobs learned about Gorilla Glass in 2006, he convinced Corning to revive the largely unused technology so Apple could put it in the iPhone.

So it’s no surprise that Apple has been toying with yet another breakthrough technology.

It’s called Liquidmetal.

Liquidmetal is a family of metal alloys that combines a variety of metallic elements. It’s a technique that rapidly cools the mixture into a “metallic glass” with a distinctly different molecular structure than conventional metals. It becomes amorphous, as opposed to crystalline.

That amorphous structure is the secret behind Liquidmetal’s many remarkable properties.

Now imagine what Apple could do with a material that:

• Is five times as strong as aluminum and twice as strong as titanium;
• Is three times as elastic as ordinary metals;
• Is highly resistant to corrosion;
• Is highly resistant to scratching and wear;
• Has a fingerprint-resistant, glossy finish that needs no polishing;
• And can be blow-molded like glass or injection-molded like plastic.

And while most of the basic ingredients of Liquidmetal — zirconium, titanium, nickel, copper, and beryllium — remain the same, adjustments to the ratios and manufacturing process can customize the alloy for many different purposes.

Invented in 1992 as part of a joint project between NASA, the California Institute of Technology and the U.S. Department of Energy, Liquidmetal creates vast new possibilities – particularly in the hands of a company as innovative and resource-rich as Apple.

As NASA’s web page for spinoff technologies puts it:

“In the same way that the inventions of steel in the 1800s and plastic in the 1900s sparked revolutions for industry, [this] new class of amorphous alloys is poised to redefine materials science as we know it in the 21st century.”

The Story of Liquidmetal TechnologiesThe technology belongs to the aptly named Liquidmetal Technologies Inc. (OTC: LQMT), a company formed more than two decades ago to commercialize the new material.

In contrast to the promise of its technology, Liquidmetal is tiny. With no factory of its own, Liquidmetal enlists partners to manufacture customized parts for customers. It has fewer than 20 employees and its market cap recently slipped below $50 million. The stock has been trading below $0.50 lately and tends to be volatile.

And yet as the owner of the intellectual property, Liquidmetal appears to be sitting on a gold mine. Still, Liquidmetal’s attempts to commercialize its product met with mixed success until Apple came along.

Intrigued by Liquidmetal’s unusual properties, Apple made a deal with the company in 2010 to secure exclusive worldwide rights to use the alloy in consumer electronics products. Liquidmetal retains the right to license its technology to other industries, such as defense or medical.

“They have been working with Apple for a long time,” Drew Merkel, one of Liquidmetal’s biggest investors, told the Cult of Mac website back in 2010. “They were making prototypes, trying to land a big fish.”

Apple Senior Vice President for Industrial Design Jonathan Ive, whose enthusiasm for alternative materials and manufacturing processes is well known, is said to be particularly fascinated by Liquidmetal.

So far, not much has come of the relationship – Apple’s only confirmed use of Liquidmetal is the SIM card removal tool included with some versions of the iPhone.

But that’s likely to change soon.

What Apple Could Do With LiquidmetalApple would not have invested more than $20 million – that was just the upfront fee it paid Liquidmetal in 2010 – simply to build a better SIM card removal tool.

Recent rumours out of Korea have suggested Apple will use Liquidmetal to make the outer case of the iPhone 5, which is expected to launch in October.

But such possibilities were being discussed as far back as 2010.

“I think they’re going to make the iPhone out of it,” Dr. Jan Schroers, a former director of research at Liquidmetal who is now an Associate Professor of Mechanical Engineering & Materials Science at the Yale School of Engineering and Applied Science, told Cult of Mac. “It’s quite obvious from what Liquidmetal has done in the past and what the technology is capable of.”

Obviously a metal with exceptional strength and durability, not to mention a silky-smooth, smudge-resistant finish, would suit the iPhone 5 perfectly.

“The next iPhone needs to truly stand out from the crowd,” Canalys analyst Chris Jones told Wired. “A change in materials is a likely way to differentiate its form factor.”

Schroers said Liquidmetal could also be used to build remarkably thin, strong seamless frames for other Apple products, such as MacBooks, iPads or big screen displays. For that matter, it would make an ideal frame for the much-anticipated Apple iTV.

Apple could even etch its logo as a holographic image into the alloy. How cool is that?

Liquidmetal’s unusual properties also make it a good candidate for a wide assortment of other components, such as an iPhone antenna, parts of rechargeable batteries and laptop hinges.

A Waterproof iPhone 5?But perhaps the most significant possible use of Liquidmetal in an Apple product is for waterproofing mobile devices such as the iPhone.

Last year Crucible Intellectual Property, the Liquidmetal subsidiary formed in the 2010 deal to work with Apple, filed a patent covering the use of the alloy as a waterproof sealant.

According to the Patently Apple Website, the patent says the process could be used in “a telephone, such as a cellphone, and a land-line phone, or any communication devices, such as a smartphone, including, for example, an iPhone. Other listed devices include an electronic email sending/receiving device or be a part of a display, such as a digital display, a TV monitor, an electronic-book reader, an iPad and a computer monitor.”

Apple itself had earlier filed for a patent on a different method for waterproofing mobile devices, so it’s clearly determined to add it as a feature one way or another.

To anyone who’s ever dropped their iPhone into a swimming pool, bathtub or toilet, such news will be welcome indeed.

And with Liquidmetal in Apple’s arsenal, a waterproof iPhone may be only the beginning.

“It is hard to predict what will come, when you leave such a technology to the imagination and creativity of Apple product development and innovation,” Dr. Atakan Peker, a former vice president of research at Liquidmetal, told Cult of Mac. “I won’t be surprised with some very interesting [Liquidmetal-using] products in the future.”

David Zeiler
Associate Editor, Money Morning (USA)

Publisher’s Note: This article originally appeared in Money Morning (USA)

This article is contributed by Money Morning. Click Here to Subscribe to their free newsletter.

Would you risk a lethal electric shock – so you could make a few hundred bucks?

It sounds like some sadistic Japanese game show. But thieves worldwide are doing exactly this.

You’d have to have rocks in your head, but ‘copper thieves’ are stealing copper wiring from electrical substations, transmission lines, and anywhere copper wiring is visible and unsecured.
There are plenty out there willing to risk certain death for some copper wire.

This is very common now. But it doesn’t always go to plan. Just last week, a man in East Kelowna, Canada, took 50,000 volts instead of a carload of copper. Click here for the news report.

The problem is so big, enterprising folk are building businesses to help prevent copper theft. How you protect millions of kilometres of electrical infrastructure is beyond me.

The theory goes that the price of copper is so high that copper thieves can make a good wicket stealing it.

But this doesn’t add up. Let’s look at the numbers. [Read more →]

April 30th 2012 – Australasian Investment Review – (AIR)

The American markets finished higher on Friday and last week, thanks to better than expected earnings and despite weaker than expected first quarter economic growth.

The S&P 500 Index added 3.38 points, or 0.2%, to 1,403.36, with the index up 1.8% for the week.

The Standard & Poor’s 500 closed above 1,400 for the first time since April 3 and the Nasdaq Composite jumped 2.3% for the week, thanks to strong earnings reports from Apple and Amazon.

And the Dow ended up 1.5% over the week. [Read more →]

The high profile hedge fund manager, Jim Chanos, reckons Australia’s biggest money earner – iron ore – will fall from $140 per tonne to $100 per tonne.

To profit from this, his fund Kynikos – Greek for cynical – is short-selling Fortescue (ASX: FMG). Not that hedge funds are any sort of all-seeing oracles. Plenty of them get it wrong. Last year the average hedge fund lost 9%.

Although, looking at serious delays to the world’s new big iron ore projects, I reckon it’s hard to see iron ore prices falling that far. Where I agree with Chanos is that it’s hard to see iron ore prices rising much from here.

But forget iron ore for a minute. [Read more →]

April 27th 2012 – Australasian Investment Review – (AIR)

Despite Europe’s woes, world steel production has recovered and hit an all time monthly high in March of 132.2 million tonnes.

Figures from the World Steel Association confirm the rebound that has seen Chinese output also surprise with a bigger than forecast improvement in March from the impact of the timing of the Lunar New Year in January and February.

March’s output in the 62 countries reporting to the World Steel Association was an increase of 1.8% from March 2011 and a 10% jump from the 120.1 million tonnes produced in February which was impacted by the New Year holiday in China.

The 132.2 million tonnes was the highest so far recorded for any month, and came as capacity utilisation also rose last month 81.1%, the highest it has been for nine months and another sign of the tentative recovery in demand for steel products. [Read more →]

April 23rd 2012 – Australasian Investment Review – (AIR)

Markets around the world generally finished higher last week, but they didn’t inspire.

US shares ended a two-week losing streak last week, but were hardly convincing.

The Dow added 65.16 points, or 0.5%, to 13,029.26 on Friday and ended up 1.4% for the week, its first weekly gain in three.

The Standard & Poor’s 500 Index rose 1.61 points, or 0.1%, to 1,378.53, a gain of 0.7% for the week. [Read more →]

April 16th 2012 – Australasian Investment Review – (AIR)

Miners in Australia, earnings in the US, and the pain in Spain will dominate markets in the week ahead, along with concerns about China, weak commodity prices and interest rates.

Led by copper and gold, commodity prices fell last week, thanks to the weak growth data from China and fears about Europe.

In the US the coming week will start one of the two busiest weeks of the quarterly earnings reporting season with 91 companies in the Standard & Poor’s 500 expected to post results.

They will be reporting into a market that has lost its first quarter zip.

The opening fortnight of the new quarter has seen the biggest percentage drop since late November, when the eurozone crisis was last at its peak. [Read more →]

Resource investing is a bit like the world of fashion.

The latest ‘hot commodity’ trend changes quicker than you can say ‘mullet’.

Of course there are evergreen commodities, like coal, iron ore and copper, which never go out of style.

They are mainstays. You can be sure coal stocks will look good for the next few years. Just like a good pair of jeans … as long as that ‘waistband doesn’t shrink’.

And just as in fashion, there are those commodities that become hot property overnight. [Read more →]

My wife and I recently had our second baby.

Little bubs is thriving.

But six weeks in, the sleep deprivation is really catching up with us!

It’s a big step going from one child to two – definitely more than twice the work! (How my parents raised five of us is beyond me.)

This lack of sleep means double-checking my mental checklist twice to avoid stuff ups. I use checklists religiously for everything. Particularly for keeping my finger on the pulse of the market, analysing stocks, and watching the myriad of data that is released each day. It’s a big market and following it all needs some organisation.

But I use checklists for everything else as well. As a sleep-deprived parent they are more essential than ever at home. [Read more →]