The most important questions about Strategic Metals
What are Strategic Metals?
Strategic metals include technology metals and rare earths. Strategic metals are metals that are essential for the economic stability of a country, but whose availability is limited. Most Strategic Metals, especially those that are eligible for tangible value, are therefore urgently and increasingly needed by industry, but are a critical raw material. This makes it a strategically important political factor in international trade relations and an interesting tangible asset with opportunities for added value.
What are technology metals?
The term technology metals comes from the general usage. Technology metals owe their name to their relevance for technological applications. Gallium, for example, is found in high-quality computer chips, and indium is an indispensable component of touch displays. There are a total of 27 technology metals, of which gallium, germanium, hafnium, indium and rhenium are relevant as tangible assets.
What are Rare Earths?
Scientifically, rare earths consist of the chemical elements of the 3rd group of the periodic table.
The term rare earthsmust be understood from the history of rare earths and the beginnings of their extraction. Rare, as it was previously assumed that the metals of this group were very rare in the periodic table. (In fact, however, some of the raw materials are not at all rare. Cerium, for example, is as common as copper or nickel). Earths, because rare earths used to be extracted only as oxides from certain minerals. Earths is the historical name for oxides.
In total there are 17 rare earths, of which dysprosium, neodymium, praseodymium and terbium are relevant as tangible material.
What are precious metals?
In addition to gold and silver, precious metals include the so called platinum group metals. These include the elements iridium, osmium, palladium, platinum, rhodium and ruthenium. They are characterized by special physical and chemical properties that make them interesting for a wide range of industrial applications. Gold, for example, with its very high electrical conductivity, or platinum and palladium as catalysts for chemical reactions. Except for osmium, all precious metals are available at TRADIUM for private customers.
Where can I get background information on commodities that qualify as tangible assets?
For insights into the areas of application in which the raw materials are processed, please refer to the Strategic Metals and Precious Metals pages. TRADIUM GmbH provides some more detailed information about the history of discovery, the chemical properties as well as the extraction and processing of the raw materials on special information pages (only available in german): gallium.de, germanium.de, hafnium.de, indium.de, rhenium.de, tellurium.de and selteneerden.de.
Strategic Metals as Tangible Asset
Why do Strategic Metals own themselves as tangible value?
The formula for strategic raw materials as tangible value is:
Low availability + increasing demand = Rarely good chances
Why is the supply of Strategic Metals critical?
The natural deposits of many strategic metals are scarce. However, limited availability is mainly related to the extraction and production of metals. Almost all production facilities are located outside Europe. China, especially in the rare earths, has almost a monopoly position and currently limits availability through self-stocking. In addition, the production of strategic raw materials is complex and expensive. Rare earths and technology metals are usually associated with other raw materials. The separation of the two raw materials costs time and money. Strategic metals are therefore often a by-product in the production of another raw material. Gallium, for example, is obtained in aluminium production, so the annual availability of gallium depends on the need for aluminium.
Why is the demand for Strategic Metals increasing?
Strategic metals are processed in a range of future technologies (e.g. solar energy, wind power, LED technology and the latest Internet and communication technology). The demand for these technologies is increasing worldwide. On the one hand, the areas of application and sales for future technologies are increasing globally. On the other hand, more and more emerging economies are becoming industrialized countries. Accordingly, rapid growth is also emerging here. In addition, ambitious climate targets and the growing interest in renewable energies lead to increased consumption in these industries.
Which commodities are suitable as tangible assets?
Private customers can currently purchase fourteen metals as tangible assets from TRADIUM. These are the technology metals gallium, germanium, hafnium, indium and rhenium, the rare earths dysprosium, neodymium, praseodymium and terbium, and the precious metals gold, iridium, palladium, platinum, rhodium, ruthenium and silver.
Does TRADIUM also sell precious metals?
TRADIUM GmbH trades not only in strategic metals, but also in most precious metals. These are also available for private customers. The tangible assets available for purchase are: Gold, Iridium, Palladium, Platinum, Rhodium, Ruthenium and Silver. Detailed information about the metals and their applications can be found on the page Precious Metals.
What is a reasonable holding period for Strategic Metals?
The purchase of strategic or precious metals as tangible assets should be approached with a medium to long investment horizon. For example, many tax benefits only take effect after a holding period of at least one year. Other positive effects of a real asset purchase also unfold their impact only over a longer period of time, such as inflation protection.
In which fields of application are strategic metals processed?
Strategic metals are processed in a wide range of future technologies. These include the automotive industry, the electronics industry, the high-tech industry and renewable energies.
What are the specific raw materials that are suitable as tangible assets?
- Dysprosium – permanent magnets, glass production, fluorescents
- Gallium – LED, Photovoltaic, Computer Electronics
- Germanium – fiber optic cables, night vision devices, infrared optics
- Hafnium – Aircraft turbines, computer electronics, laser technology
- Indium – displays, touch screens, solar technology
- Neodymium – permanent magnets (e.g. in wind turbines and electric motors)
- Praseodymium – Permanent Magnets, Aircraft Engines, Ceramic & Glass Industry
- Rhenium – Aircraft turbines, gas turbines
- Terbium – fluorescents, high-temperature fuel cells, permanent magnets
How can I find out about current developments?
Industry news on market developments as well as exciting new areas of application for your tangible assets can be found in the TRADIUM Invest Newsletter. It is sent out several times a year. Log on to the industry news section. You can also find us on Instagram and LinkedIn.
Purchase of Strategic Metals
What is the minimum amount for a purchase of tangible assets?
You can buy tangible assets directly from TRADIUM starting from mid five-digit amounts. For lower amounts, savings plans or other investment models, we will be happy to recommend one of our long-standing sales partners. Do not hesitate to contact us.
Where do my tangible assets come from? Who is TRADIUM GmbH?
The Strategic Metals are purchased from TRADIUM. TRADIUM GmbH is an owner-managed company in Frankfurt am Main. Since 1999, TRADIUM has been successfully supplying international customers from industry and trade. TRADIUM’s customers come from a range of innovative industries such as electronics, automotive, glass and ceramics, and dental. In addition to the close cooperation with industrial customers, TRADIUM also offers private investors the purchase of strategic metals as an investment form for the diversification of the portfolio.
How can I be sure that I am not acquiring conflict raw materials?
Four important aspects prevent your assets from being conflict materials:
- Through TRADIUM’s industrial client business, private investors can be assured that no conflict materials will be acquired as part of the tangible asset portfolio. TRADIUM’s products are purchased for the industry and resold to the industry upon liquidation. Accordingly, the raw materials must meet the requirements of the industry. The specifications require TRADIUM to provide unbroken transparency along the supply chain and annual confirmation proving that no conflict materials are supplied.
- TRADIUM complies with the requirements of the EU Due Diligence Regulation.
- TRADIUM GmbH rejects the trade in conflict materials on ethical grounds.
- Conflict materials are commonly referred to as tin, tantalum, tungsten and gold. Thus, of the commodities sold as tangible assets at TRADIUM, only gold, theoretically, is a conflict material. In fact, however, no conflict materials are sold at TRADIUM.
Strategic Metals Storage
How can I track the price and performance of my tangible assets?
Our metals are not traded on the stock exchange, so there are no public trading venues, as for stocks and funds. Customers receive a quarterly warehouse logistics cost statement, which serves as an indicator of performance, when the tangible assets are stored at METLOCK GmbH. Since the actual value of the tangible value is only determined at the moment of sale, concrete statements on the value can only be made as part of a buyback offer.
How long can the metals be stored?
Technology metals do not oxidize. You buy the rare earths directly from TRADIUM as oxides. If stored properly, your property assets can therefore be stored for an unlimited period of time.
Where can my raw materials be stored safely?
Their raw materials can be stored at the sister company of TRADIUM GmbH, METLOCK GmbH, in a high-security bunker in Frankfurt am Main. METLOCK GmbH manages a duty-free warehouse that offers private customers storage space at the security level of a bank. Your advantage: As long as the tangible assets remain in the customs warehouse, there are no costs for customs clearance and VAT.
Thanks to its connection to TRADIUM GmbH, METLOCK GmbH is an expert in the storage of strategic raw materials and precious metals. Therefore, your property is in the best hands there.
What is the cost of storage at METLOCK?
The costs for logistics including warehousing, administration and insurance amount to a maximum of two percent per year. The current value of all goods in your depot at the respective cut-off date serves as the basis for calculation.
Under what safety regulations is my property value stored?
Your property value is stored at bank level (security class 10 CD EX) and is additionally insured against theft and fire.
What are the tax advantages of storage in duty-free warehouses?
Tax advantages vary from country to country and should always be carefully checked in advance by you or your tax advisor. The following tax benefits arise for the Federal Republic of Germany:
The purchase of raw materials at TRADIUM is always VAT-free. After a one-year holding period, there is no sales tax, no final withholding tax, no property tax and no income tax.
Collective storage or individual storage, where is the difference?
Usually, the property values are stored in collective custody (also called fractional custody). Here, the buyer owns a fraction of the total quantity of the stored raw material, without it being assigned to a specific batch, packaging unit or similar. So let’s buy a portion of a total quantity stored.
Individual storage is also possible upon request. In individual storage, the purchased quantities are removed from a batch or packaging unit and separated. The raw material is then provided with a new batch number and its own analysis certificate. The investor receives a separate area in the METLOCK duty-free warehouse. Depending on your needs, this can be a safe, a grid box or a simple parking space.
The disadvantage of individual storage is that it makes liquidation more difficult if the quantities of raw materials are too small to cover industrial customer requests. In the case of collective storage, the non-cash asset is sold as part of a larger total quantity and thus finds buyers more easily.
Do I have access to my property at any time?
Due to the high safety requirements, a pure inspection of your property in the bunker can only be offered to a limited extent. If you would like a personal visit, we will be happy to inform you personally about the requirements.
How can I check that my metals are actually stored at METLOCK?
The holdings are reviewed and verified annually by an independent auditor. If necessary, all customers are free to commission their own auditor to certify their personal holdings at their own expense and taking into account the administrative costs.
Sale of Strategic Metals
How can I ensure that my assets are well liquidated?
As an industrial customer supplier, TRADIUM GmbH has a good insight into the demand expectations of the industry, so that the tangible assets you have acquired will most likely find a buyer. Batch numbers and analysis certificates are stored with TRADIUM for all raw materials. The packaging units are also kept in their original condition. This simplifies a sale to industry.
Is the buyback guaranteed?
If you wish to resell the raw materials, TRADIUM is available as a potential buyer, but this always depends on the economic and market situation. You are free to resell to third parties at any time.
What discounts can be expected in the event of a resale?
There is no fixed discount. On the contrary, this depends on the respective economic situation and demand situation on the part of the customers. TRADIUM will be happy to provide you with a buy-back offer if required.