Daniel Ghali

[music] MoneyTalk's Anthony Okolie has a look at the state of China's economy after ending its covert restrictions and in today's WebBroker education segment, Jason Hnatyk will show us how you can find commodities data using the platform. Here's how you can get in touch with us. Just email moneytalklive@td.com or fellow that your response box under the video player in WebBroker. Let's get you an update on the market action, of course this is the first trading day of the month of March. How are we doing? It's a bit of a mixed session. On Bay Street where in positive territory. The TSX Composite Index of 60 points. A little less than 1/3 of a percent. Let's take a look at Royal Bank. Of course the thick of bank earnings season right now to hundred 32 bucks and $0.44 a share down a little more than 4%. Noticing some transplant across the street including the building of… Provisions in the case of any sour loans for rocky economy. You have Royal Bank obviously, a heavyweight at the top of the TSX, taking some points off the table. Noticing some moves in the energy space including Bay text. In the news yesterday they were acquiring Ranger oil. Getting back some of that lost ground, Bay text up about 4 1/2%. Now, south of the border, of course this will be another month where investors try to weigh out where is the Fed headed? Where is the state of the economy and where they had up with interest rate hikes and how long they stay there. Still an indecisive climate. The S&P 500 are pretty modest up a little less than 50%. Rather down a little less than 1/5 of a percent. The tech heavy NASDAQ. Down 67 points. We'll call that a little more than half percent. Nvidia, noticing some weakness in the chipmaker, down about 2%. An aftermarket update. While investors weighed the outlook for commodity and fear of a recession an interesting shift and demand is taking place. Joining us now to discuss is Daniel Ghali, Senior Commodity Strategist at TD Securities. Great to have you back in the show. >> Thank you Greg. Great to be here. >> A lot of concern among investors over this economy is headed. For good reason. We are focusing on North America. You're noticing some global trends. What you see? >> Greg, I think the point here is that the West appears to be losing control on the pricing of commodities. What I mean by that is if you look at copper prices… Most commodities are trading higher than what the macroeconomic regime would dictate. So copper prices are significant and higher than what leading demand indicators alone would suggest. when you look at gold prices they are trading higher than yields would suggest. I think what's going on behind-the-scenes is the East is driving the physical demand that is associated with these price dislocations. The West is losing control of the pricing mechanism because they tend to impact the investment landscape and right now, it's not about investor flows it's actually about the physical demand, physical supply and constraints globally that we've seen which tend to be Eastern focused as opposed to Western focused. … If you look at how gold acts in local currency terms for emerging markets, it actually is a pretty amazing inflation hedge when inflation is particularly elevated or particularly low. We call it a tail hedge of inflation actually. So if you look at goal of those perspectives, it's not a surprise to see Turkey, facing hyperinflation today has been a massive buyer goal. Elsewhere in the world, China has been a major buyer of gold. Probably related to the shifting geopolitics. Needing to diversify away from US dollars towards another reserve currency or reserve asset like gold. That is really nobody's liability. That's a trend we are seeing, again, rising in the east. Qatar is doing the same. The GDC Nations have been one of the larger buyers of gold over the last year as well. All of this is really catalyzed by the war in Ukraine which, really, resulted in a mind shift for a lot of these Eastern central banks. >> Obviously we saw Ukraine as well, pretty frowned effect in the early innings at least on oil and gas in parts of the energy space. Then you have China, reopening. Trying to gauge the effect of how I guess, consumption demand they will have. How does that play into oil and gas in those areas? >> Great question. I actually think now you're starting to see evidence that the implications of China's reopening are not broad-based. When you look at overnight, there was the release of the manufacturing PMI of China. It was particularly strong. When you look at the details therein, it does suggest that it's not necessarily a domestic recovery in China. It's actually probably also associated with stronger demand in the West. Which is actually, in turn, tied to the miracle whether faced and particularly mild weather in the US as well. Believing demand indicators for metals like copper and aluminum still suggest a downdraft and demand. And I think it's really happening here is we've seen stockpiling in a pretty significant way. Copper users, aluminum users are overstocked today which tells you that can consume less of this status this stuff over the next 3 to 6 months. The caveat to that of the property settlers and I think that's probably a little bit more gradual but we are starting to see some signs that it is going to start to recover. But again, exited take some time. >> You mentioned copper. Whenever I hear copper now, I think of the electrification of everything which people talk about. Here in North America we think North Americans like Tesla… Other companies. But China has a huge market for EV's. People producing it. What is China's demand like for those easy electrification metals? >> China has been really leading the charge on the push for electrification. I think in 2019, electric vehicles were about 2% of auto sales in China. Today they are closer to 45%. That was, that dramatic shift, was really subsidized by the government. So most taxes some of those tax incentives that went away and expected EV's to lose market share. But I think the big picture really underappreciated when it comes to the electrification trends is that everybody in the West is looking towards… Is that China actually controls every single part of the supply chain that's necessary for the electrification happen. So while this theme is often touted by the West and thankfully so, the east is really the one who is controlling the supply chain there. So if you look at global capacity for the… Going into making a battery for example. 70 to 80% of the capacities in China. The same is true for battery cell production. The same is true for EV manufacturing. Even going further down the line or earlier and that supply chain. The material processing capacity that is for things like copper, lithium, nickel… A big chunk of that is still in China. So, I think this is something that is underappreciated because as trade flows start to diverge, the West is going to perhaps need to build that capacity up themselves. That's just something we have not seen being done yet. >> As the world does work toward electrification, the argument is made and it's a logical argument that you're gonna need oil. To get any gas for a while to make this transition. You will need for a while. What we think about oil demand in this climate? It seems it's always a to-and-fro. >> From the cyclical outlook, you have to consider the fact that over the next five years, China is overwhelmingly driving the demand growth for oil. Beyond that, India is really driving it, actually. So, you know, that is been the case for some time. But again, going forward, I think what is often missed is that over that same time horizon, five, 10 years out… North American demand and European demand is actually in a decline quite substantially. We are already starting to see signs of demand destruction in oil. That is people's preferences to buy hybrid vehicles or fuel efficiency gains actually have been one of the largest contributors to demand destruction for oil and EV sales as well who are gaining market share faster than many had anticipated prior COVID. Again, those shifting trade flows are pushing geopolitical relationships away from the status quo that we've been used to for the last four years and towards a world that is potentially more multipolar in which the need for diversifying away from US dollar reserves is growing, where China has potentially a role to play there and were gold definitely is already seeing some benefits. >> Interesting stuff indeed a great start to show the show. We will get to your questions for Daniel Ghali in just a moment's time. A reminder that you get in touch with us any time by emailing moneytalklive@td.com or Philip at your response box under the video player in WebBroker. Right now let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading. Shares of Kohls are in the spotlight today. That after the US retailer post holiday quarter sales well below analyst estimates also provided the street with a pretty tepid forecast. Same-store sales were down about 7% in the quarter and the profit margins squeezed by inflationary pressures and clearance prices on merchandise. A little shy 3%. US drugmaker Novavax is warning investors of substantial doubt over its ability to keep the business going. The company's latest quarterly results mixing fixation makes expectations as it struggled to sell its COVID-19 vaccine which came to market late compared to rival shots from a during an advisor. Supply chain disruptions in a vehicle recall or weighing in on Rivian Automotive, recalling almost 13,000 vehicles over a sensor issue. The stocks down more than 17%. A quick check of the main benchmark industries the TSX Composite Index, operable 70 points or 1/3 of a percent to start the first trading day of the month of March. Some of the border, but a mixed picture. The bit of the S&P 500 very modest little more than 1/10 of a percent. >> We are back in with Daniel Ghali taking your questions about commodities. Lots coming in. Why is silver dropping in gold isn't? Some people have always said that silver is a poor man's gold. >> They do tend to diverge over a shorter period of time. On a day-to-day basis they seem to move to critic and when you Zoom out and look at it in the longer term perspective, you can see them diverge quite substantial substantially. Fundamentally speaking, silver is more of an industrial metal and gold is. So 54% is industrial fabrication and that doesn't even account for solar panel demand and things like that. But it tends to be very sensitive to the economic cycle. So it goes back to what we were discussing about no evidence of a reopening boom in China when it comes to metals demand. >> When we talk about the metals demand and how we see it going forward, one of the interesting discussions I heard us with the fact that if you want to go toward electrification, then you talk about copper and other metals, you talk about silver industrial uses in gold and the physical buying you are seeing out there… Are reminding enough of this stuff? Is there enough investment going into mining to make sure we have the project the production going forward. >> We are not in close to the liberal level of investment we need to meet our goals. If you look at the amount of copper investment that is needed in mining and refining and even in terms of recycling as well. We are probably looking at $1.2 trillion needed over the next 30 years to meet the energy transition goals. And we are running far below the run rate required to meet the threshold. So if it does appear thus far, that we are going to need to rethink the incentive structures such that both the private sector and the public sector might have a role to play in getting that investment done. >> Is the political will dare to say "yes we need to support mining in this country, this continent?" Will we see this? >> I mean I have not seen that yet. I think there is a substantial amount of political wall to get the energy to transition from energy sources. But the realization that you can't transition away from oil and gas without mining and metals has not really come to the public it. >> Interesting story as it plays out. Another question now. (Greg reads question) > I think both of those are really valid are really relevant pieces of the puzzle. When you look at copper prices, gold prices, they are trading at overbought levels relative to what the demand implies. But I think that increasingly, you're starting to see valid reasons for why that is the case. In the case of copper, we had substantial supply issues, the same was true last year, by the way. But thus far this year, we had issues in terms of mining supplies in Panama, in Peru… Some in Chile as well. So in Indonesia as well. These are really some of the largest mines in the world. So there is a justification for copper prices being above what will be applied solely by the demand. The same is true for other precious metals as well. Gold, we spoke about its disconnect with US rates which tends to be the financial asset to which gold is close. But, again, we are seeing a lot of physical demand from the east which tends to justify actually that overvaluation we are seeing. >> The thing with oil to his it seems to be parallel with the metal story in the sense that most of the major oil companies see more focused right now and returning value to shareholders or share buybacks or special dividends or dividend boost. They are not really investing in oil and gas. Is that set us up for some trouble in the years ahead? As we try to transition? >> On the oil and gas side absolutely. We are seeing the particularly in the US… Which historically or at least in recent past has been the swing producer. We are not reinvesting sufficiently and then patched to meet that threshold for the producer. OPEC plus now controls 90% of the world's spare capacity. If you dig in a little bit deeper than that, that's really controlled by Saudi Arabia, and Iraq and… Given the outlook for oil demand, that is primarily going to be from China, from India, at a time when demand from Europe and from the US is actually declining it over the next 10 years, you have to imagine a closer relationship between the GCC, OPEC plus Nations in the East which is going to have a significant impact on oil prices. >> Interesting stuff. Let's take a question now from the audience. The US dollar strength we've been seeing recently. It is the return of US dollar strength a risk to commodities? >> I mean absolutely. The US dollar strength that we've seen at the end of last year was one of the reasons commodity prices didn't even trade higher than they otherwise would have. So far, actually earlier in the year, the decline in the US dollar has been one of the reasons that some of these assets have performed well. They all tie together. So, when we are talking about you know, Turkey, Qatar, China buying gold, that implicitly, those Nations not purchasing US dollars but instead purchasing gold. So instead I think the narrative that the East is increasingly dominating flows in commodities markets also jives with the idea that overvaluation dollar amid intense geopolitical regime, you have to imagine over the next few years that the US dollar is going to decline in value. So I think, of course, higher US dollar is a threat to commodity prices but on the contrary, taking a longer-term perspective, I think there's room for commodities. >> Sounds like someone is serious about commodity investment. Where the US dollar is : where it might be headed. How tough is that? I think heading into this year, someone said "we had the big rush in the US buck. We think this trade is over. Is this a tough one to play?" I mean absolutely. Markets have always been difficult but some people see them as the residual of all or more other market forecasts. One thing is the head of FX strategies been talking about is really fits well with the conversation we had so far. Is that the fact that the West is losing control the pricing of commodities, the physical flows are increasingly dominating investing flows, jives with the idea that central bank's ability to influence currency flows is decreasing as well. So the commodities supercycle thesis is going to drive currency prices as well. So that is something that, you know, obviously central bank sort of much control. You can't print commodities right? So they are losing control on that as well. >> Fascinating staff as we see how things shift in the geopolitical frame. As always home make sure you do your own research before making investment decisions. We will get back to questions with Daniel Ghali on commodities and just moments time. A reminder of course he can get in touch with us at any time. Commodities, data, WebBroker, these are tools which can help. Joining us now with Maurice Jason Hnatyk, Senior Client Education Instructor with TD to education. Jason welcome back how do we use WebBroker to track the performances of commodities? >> Great to be here as always Greg. Maybe a quick shut out to those in the audience today. Today's the RRSP contribution deadline so let's make sure we take care of that before it's too late and for those watching this program on demand, I trust you've taken care of that will in advance. But commodities and WebBroker can be a great opportunity to track to see where the winds are blowing in the market or maybe you've got some stocks that are very sensitive to particular commodities even if you're not investing in them directly. WebBroker has some useful tools to help keep you informed. So from the top of the page, we will choose "research". We will go with "overview". That's kind of a catchall place for a lot of great information. There's information here about news… Analyst information. Let's scroll down here on the left-hand side. Once we get down below the main indices, with the whole section here for commodities. There is energy, metals as well as agriculture. We are getting early high-level overview of how things, major commodities and how their changing. How the prices are brewing and how they're doing over a period of time here. So we can just take a quick look at the first commodity on top of the page. West Texas… These are the contracts currently trading how it's done from the previous trading day and in addition we also get a sliding scale. We can see from the lifetime of this particular contract how it's doing right now. It looks like it's splitting the difference right down the middle. I guess the next step, if you're looking to get a little more information on the commodity itself is an opportunity to do a quick review of some of the news that might be out there that's moving the markets. So we go back to the top of the page, under "markets" we will just go down to "news and commentary". The reason I like to bring people to this page as we have the opportunity to actually search for news items that are important to us. So we will just search for energy. Now we get an opportunity to see. Here we have a new story from just a minute ago talking about pipelines and obviously a key topic for many energy specific companies. So as an investor, I now not only can see the track prices I can also see specifically to what I am interested in finding information about. >> All right. Someone can see the quick price overviews, some headlines. What about someone is interested in finding out more. How do we dig deeper on WebBroker? > Yeah. If you have a really high need for information, WebBroker has it covered. So let's jump back into the platform. I'll show you where you get that next level data. Once again, from research at the top of the page, we have a report section about two thirds the way down the markets call in. A couple different pieces of information I like to highlight for the audience today. The first is from our friends over at MorningStar. If we scroll down and find on the rights right hand side, we are sector reports for MorningStar. We broke down all the major sectors and industries within the market. We want to maybe keep this energy focus going here. If we go ahead and select the energy section, it's going to There's some really up-to-date and useful, taking a deep dive into forecasts and some good considerations to really keep you informed. So that's one report. The next thing I like to show you is from the good folks over at TD Economics. If we continue scrolling down this page, we have a TD Economics area where we go into this subsection and click into their page. We have not have an opportunity to look at different focuses either geographically or amongst the broader economy. If you click on the economy button down at the bottom, there is an actual subset for commodities and other industrial information here. What's really cool that this pages I really reckon folks go here because there some insightful information to really kind of not only talk about what things are happening on the market but also some projections and considerations to think about that will be impacting the future state of the economy and the commodities that they are focusing on here today. >> Great stuff as always Jason. Thanks for that. >> My pleasure. >> Jason Hnatyk, Senior Client Education Instructor TD Direct Investing. Make sure to check out the learning centre a WebBroker for live interactive master classes, and upcoming webinars. In classes. Now let's get back to your questions about commodities with Daniel Ghali. The first reminder of height get in touch of us. Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box right here on WebBroker. Just writing your question and hit send. We'll see if one of our guests can get you the answer you need right here at MoneyTalk Live. >> Back now with Daniel Ghali taking your questions about commodities. Can gold prices hold current levels if we head into a recession? When a fascinating discussion off the top about physical demand for gold. What happens to gold in a recession? >> Actually, gold tends to do quite well. A typical recession playbook is that you would buy gold in anticipation of fed cuts that are coming. I'd say this cycle is particularly challenging because inflation is more elevated and central banks would like. Because it appears also there losing a bit of control and that inflation so there is a risk that they might need to keep rates higher for longer even though growth is slowing down and we might be heading into a recession. That's an area that I'd say is probably not your typical playbook for gold. A negative scenario for gold. But if a recession is sufficiently deep that it solves the inflation problem, then it is basically the best case scenario for gold. > When I think of everything we've been through the past couple years and trying to navigate as investors, I think it's perfect underscore the fact that the rules, as we understand them, perhaps a broken that they might not play out exactly the way we think because there's been such a huge dislocation. >> Yeah. Absolutely. The rules of the world are changing. The geopolitics of disgust. These are really slow moving forces that really have a powerful influence on global markets in our daily lives over the longer run. So I think we are starting to see the first signs of a regime shift in global markets and I think over the next decade, it's quite likely that they are going to dramatically influence gold markets. >> Okay. We want your view, the audience wants your view on copper. When a copper? >> Electrification is been part of the discussion for copper. One interesting fact, you know, is that over the next five years, you look forward and you really don't see enough copper supply to meet the electrification demand trends that are already ongoing. When you look one or two years down the road, you actually have a huge amount of supply growth coming online on the back of legacy project completions. These are projects sanctioned in 2017 that just happened to be completed today. That copper supply growth is so large that it is sufficient to meet the demand over the next 1 to 3 years and even so to put us into a surplus over that time frame. The challenge, I think, that we are facing today is that the mining side is having a huge amount of disruptions. And it appears to be more structural in nature then coincidental in nature. So when we are talking about Panama restricting one copper mine in particular over the last few weeks and months, or the unrest in Peru… All of this is really symptomatic of societal push to share the wealth that is generated by these commodities. To share in the environmental burden. All of which are really just frictions to that supply coming online. So that's one of the reasons I think copper prices are higher than you would expect based solely on the demand side of the equation and it's not clear to me that that's something that's going to disappear over the next year. >> We talked about political risks and in terms of how that jurisdiction is friendly or unfriendly to that. Are there any jurisdictions, when we talk about copper that falls the side of that? Or are we minding in parts of the world were not sure where the governments had is that? >> When you look at all the projects that are sanctioned today are feasible over the next two years, overwhelmingly they are coming from what our increasingly non-friendly jurisdictions. Where a lot of people are looking at it in terms of you're going to need a higher rate of return in order to sanction this project. But the prices are not there to justify those returns in the outlook and prices hasn't gotten there yet. That's another reason why you might expect prices of industrial metals to rise substantially with longer-term because we are in a commodity super cycle and because you need prices to incentivize that supply. >> Someone wants your outlook for aluminum. >> Aluminum is a really interesting one actually because over the course of last year, we've had substantial supply disruptions on the basis of high energy prices. Energy costs are one of the high or the largest cost when it comes to, to supplying or producing aluminum. More recently, we are starting to see supply disruptions as well on the basis of power cuts. But those are related to really drastic drought in 1 Province in China in particular which is the second largest producing province in China which is the largest producer in the world. So, the fact that they are experiencing severe drought, I think they received 96% less rain than they received last year so it's a pretty severe drought. It's causing issues with their hydropower generation which is forcing curtailment of production. That is not being reflected in the price thus far because the demand side is also weak. So this is, I think, contrasted with what we are seeing in copper, the destruction of the supply side has not been sufficiently large to offset the drag from the demand side. >> This is something we often don't think about right in the terms of extreme weather events, drought or storm activity, hurricanes… What that could actually mean for some of these commodities. Is that a space that bears watching more carefully moving forward? >> I think absolutely. This is a consequent of climate change. Weather is becoming increasingly relevant for global financial markets whether we like it or not. As a strategist, I have no ability to forecast weather so I definitely don't like that aspect of global markets but the reality is, over the course of the last few months we have seen it in currency markets, we seen it in energy markets, gas prices in Europe have really collapsed on the basis of weather. So whether his growing importance for all markets absolutely. > Fascinating stuff. We will get back with your questions for Daniel Ghali on commodities in just a moment's time. Always do your own research before making investment decisions and a reminder that you can get in touch with us anytime. You have a question about investing in what's driving the markets? Our guests are eager to hear what's on your mind. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com. Or you can would use the question box right below this screen here in WebBroker. Just writing your question and hit "send". We will see if one of our guests can get you the answer you need right here on MoneyTalk Live. China's economic recovery is shaping to be a little more compressive and pretty rapid based on the recent economic data. Our Anthony Okolie joins is now to discuss the TD Securities report on China's post-covert balance what it could mean for the global economy. Anthony. >> Thanks very much Greg we will start with a look at China's manufacture sector. It expanded at the fastest pace in 11 Years in February. Purchasing managers index or PMI rose 52.6. That's versus that 50.1 that it experienced in January. Well above consensus estimates of 50.6. Nonmanufacturing or the services PMI also performed better in February as the chart shows as well. Now, TD Securities believes that the data will provide some relief to global risk sentiment amid higher for longer fed rate expectations. Now, the PMI data highlighted easing supply pressures as China opens up. Which will help ultimately the manufacturing sector. Now, as China opens up, there are fears that will likely be inflationary for the global economy. TD Securities disagrees with this reason for several reasons. They cite the China's growth is not big enough to prime the global economy as it did in late 2008 during the financial crisis. Secondly, China's overall trade with the rest of the world has dropped and is expected to do so in the months ahead. Additionally, China's stimulus is likely to be domestically focus with limited repercussions for global demand. Now, I also list other factors such as weaker currency meet which may lower the price of their exports at a time were global goods price inflation is beginning to ease. Now, TD Securities says the China's road to recovery will depend a lot on the consumer and that households in China have actually built up significant cash during their frequent lockdowns which of Kirby spending there. TD Securities sees plenty of revenge spending as they call it by consumers particularly for out-of-town travel to popular Chinese destinations in the Asian region. However, TD Securities cautions that is travel and domestic tourism ramp-up in China, they expect to spillover to the G10 Nations to be fairly limited. That is not confined to tourism which accounts for relatively little of G10 GDP. > And now this week and the National People's commerce I think it starts this weekend with economic gold and what's the take on that? >> This is an important meeting because it's the first one since the end of the COVID zero policies. TD Securities expects China to and to announce a 2023 GDP target around 5.5%. Which is just below TD Securities estimate or forecast for a 5.3% GDP growth this year. Now, TD Securities things that the target range is achievable by China. They also expect the government to reiterate positive support measures to prop up the… Sectors which are both key for the country's economic recovery. >> Interesting weekend ahead thanks Anthony. > My pleasure. > MoneyTalk Live's Anthony Okolie. Let's check in on the markets. We are into March now. January was a moneymaking month. February was not as we all know. Now as we all start off in March, TSX Composite Index up about 1/3 of a percent. Even though the price of crude is not doing much today. I did notice the money moving towards the energy names. Pretty modest. We do have some positive territory up a little more than a percent, 46 bucks and change our share. Hudbay minerals on the upside today… South of the border, S&P 500, I want to check in what's happening here. Modest sweetness to start the trading months. A little less than seven points a little less than 1/5 of a percent. The tech heavy NASDAQ bearing a little worse than earlier in the session and Nvidia down about 1.8%. 1/4% for NASDAQ. Nvidia… There you go. Three bucks and $0.21. Now we are catching up to Rivian. . Following my eyes now of course the forecast failing to please the street. That stop down almost to the tune of 17%. Keeping me on my toes today, back with Daniel Ghali from TD Securities talking about commodities. Here's an interesting one. What's the outlook for the PGM metals like platinum and Palladium? >> Platinum group metals are some of the mine are precious metals which are actually really crucial to our everyday lives. Currently, they are primarily used in auto catalysts. So it's essentially a metal that they put in your auto catalyst for gasoline vehicle or a diesel vehicle for instance which catalyzes a chemical reaction which reduces pollution. So, over the last few years, looking forward, stricter emissions regulations and actually forced more PGM loading vehicles so you have to use more platinum, more Palladium in each vehicle that you produce in order to meet those pollution thresholds. Now, if we look forward in time, particularly over the last few months, we've got a lot of information about the supply side. Right? Russia is one of the world's largest producers of Palladium in particular. During the war in Ukraine to produce at metal and provided to the rest of the world. Overall we've seen very limited impact supply chains. Trade flows have been redirected quite easily and primarily the reason is the transportation methodology that most people use this biplane. So, that Palladium can go from Russia. We were trying to platinum South Africa's largest producer in the world and South African supplies actually been severely challenged. Part of the reason is back to the energy sector. You know, they have a single provider system. They have had one of the last several decades and over the last year, that power provider has really struggled to deliver the energy needed for minors to produce… It's been a significant supply disruption. Recently, the government is attempting to move away and open the door to private companies investing in renewable power. So, over the longer term, you do think that's gonna change in Mark minors will build these large solar where they can use the energy provider from solar panels for their operations. So in the longer term, there is some relief on the supply side but over the next year, consistently we've seen load shedding in South Africa which means not enough power for the minors which means supply disruption that is supported platinum prices. So we are seeing those to diverge and those can potentially persist for some time. >> Fascinating stuff. I want circle around the top shifting power dynamics on a global scale and what it can mean for commodities. What it really really need to be mindful of his investors for the shift? >> In the past were central banks of and primarily the drivers of global markets over the next 10 years, it might be changing into a world where commodity buyers and sellers are increasingly important. So over the last little while, we've had Pres. XI visit : Nations, China playing a more dominant role of the commodity sector were potentially you might start seeing oil be sold more in other currencies and it is in US dollars. Where that is a threat to the US dollars dominant role across the world. >> Fascinating stuff Daniel. So glad you came here to share with us. >> Thank you. >> Daniel Ghali Senior Commodity Strategist at TD Securities. Stay tuned on tomorrow's show Juliana Faircloth will be our guest taking your questions about industrial stocks. Think airlines and rails. The equipment that all goes along with it. Those of the topics of discussion. A reminder that you can get in touch with us by emailing moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching and we will see you tomorrow. [music]