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The New Alternative

19.04.22

German commodities supplier TRADIUM GmbH offers private customers the rare opportunity to purchase sought-after strategic metals. L-J Andrew spoke to CEO, Matthias Rüth, about the growth in popularity of this new alternative investment class

Gold has always been popular as a means of diversifying an investment portfolio. For some years now, another, far less well-known asset class has also emerged: strategic metals.

Strategic metals are essential to the production of high- performance technology appliances and thus in growing demand by industry. ‘Strategic metals’ is an umbrella term, it includes commodities such as technology metals, rare earths and platinum group metals.

Strategic metals are indispensable for the needs of modern societies: without them, there would be no high-performance smartphones, no high-resolution LCD screens, no fast fibre- optic internet connections. They are used in various innovative products and are the guarantor of tomorrow’s standard of living: self-driving cars, environmentally friendly means of transport and state-of-the-art entertainment technology.

This is precisely where Matthias Rüth sees the decisive advantage for investors, as he explains:  Compared with gold, the charm of strategic metals is that they have far more industrial areas of application and the fields are growing constantly. At the same time, they are only available in limited quantities.”

Rare opportunity for private clients

Until a few years ago, strategic metals were only available to industrial customers. The German commodity trader TRADIUM GmbH has been supplying customers in over 70 countries with these essential metals for more than 20 years. At the same time, the interest of private investors in commodities has grown steadily and since 2012, TRADIUM has been offering private customers the opportunity to buy strategic metals as a type of physical investment.

Just like industrial customers, private customers buy their commodities physically. Form and quality are in line with industry standards, so the processing industry can buy the products back. Private customers buy for a variety of different reasons, Matthias highlights: “Some buy strategic metals as a protection against inflation, others expect to be able to profit from rising prices.”

Duty-free storage in the German “Fort Knox”

Unlike gold or silver, strategic metals must always be stored properly to make sure they can be converted into cash at any time. For this purpose, in 2012 Rüth bought and converted a World War II bunker near the company headquarters in thefinancial and trading hub Frankfurt. With an armoured door weighing several tonnes and two-metre-thick walls, it offers bank level security. The bunker is also certified as a bonded warehouse, this means that no value-added tax is charged on tangible assets stored here - not even for private customers.

In order to guarantee transparent ownership, when Rüth converted the bunker, he also founded the company METLOCK GmbH which takes care of the ongoing operation of the bonded warehouse in the bunker. If a customer wants to turn his or her asset portfolio into cash, TRADIUM makes an offer to buy it back - as simple as selling a gold bar.

Long-term opportunities

According to Matthias, the outlook for strategic metals is very good - especially for buyers who are looking to invest over five to ten years. They can thus protect their assets from negative interest rates and, with a bit of patience, also make a profit: The price for gallium for example has doubled within the last five years and rare earth like dysprosium even quadrupled its value.

In a fast paced and ever-changing world, it’s important to keep a relevant, varied, and extensive investment portfolio.

With the modern worlds emerging reliance on these strategic metals, the popularity and rewards as an investment opportunity will only grow over the coming years.

Learn more about this unique opportunity on our website:

www.tradium-invest.com

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