Don't know if this is a cue to stock up on film...

[Two23]

I shoot wet plate, and it is based on silver nitrate. It's the single most expensive ingredient.

 

[Agulliver]

I'd have to recheck but I'm pretty sure it's labor.

Oh absolutely yes.

I was thinking more their biggest outlay on physical resources. Harman buy a literal tonne of silver nitrate every year and it's by far their largest outlay on "ingredients". So it is not unimportant, but it's not the biggest factor in the price of film.

I'm not rushing to stock up.

 

[koraks]

I was thinking more their biggest outlay on physical resources. Harman buy a literal tonne of silver nitrate every year and it's by far their largest outlay on "ingredients". So it is not unimportant, but it's not the biggest factor in the price of film.

Yeah, it's a big expense for sure. Base materials are likely a significant expense as well.

 

[Don_ih]

It does not matter what the other materials used cost. The price of the film already includes those. If the price of silver goes up, that will likely increase the price of silver nitrate even more (because it's a secondary product), which may increase the cost of borrowing (assuming they get their stuff on credit, like everyone else), and that will all increase the price of film and paper. Probably a noticeable amount.

They can also get away with a price increase. Film is "popular".

 

[MattKing]

There is already a big increase in cost for the acetate substrate used in most of our still films.
I wonder how the relative costs of substrate and silver compare?

 

[koraks]

assuming they get their stuff on credit, like everyone els

There's no default payment term. Sometimes it's to the advantage of the buyer, sometimes to the seller.

 

[Sirius Glass]

History has shown that prices for film, paper and processing continue to go up over time. Therefore I found that stocking up on film has always been profitable for me.

 

[Don_ih]

There's no default payment term. Sometimes it's to the advantage of the buyer, sometimes to the seller.

The advantage will always be to the lender, not the buyer or seller. If the buyer pays cash, then no lender is involved. So I have no idea what you're saying.

 

[koraks]

The advantage will always be to the lender, not the buyer or seller. If the buyer pays cash, then no lender is involved. So I have no idea what you're saying.

I was responding to your initial remark, which seemed to imply that in general the purchaser finances the purchase from some kind of 'lender'. In reality, this is often not the case, in particular with larger corporations. They have payment terms on the supply side that often exceed the payment terms they apply to their customers. Effectively, they finance their purchasing directly from customer orders. Whether this is possible depends on a number of factors that contribute to bargaining power, but also warehousing/stocking policies, production run sizes, MOQ's etc.

In cases where the payment terms on both ends of the company are not as advantageous, it's still possible that purchases are financed from existing assets - e.g. cash on hand. In the case of Harman, which manages to make a reasonably healthy profit on a yearly basis, this is likely the case.

How Harman specifically manage their cashflow I don't know; some of it can be deduced at a very coarse resolution from their financial statements, but details of course are missing.

The statement "assuming they get their stuff on credit, like everyone else" is not representative of the reality of cashflow management in a corporate environment; as always, reality is more colorful. Keep in mind we're not talking about a hardware store on the corner with a $2m turnover.

 

[Don_ih]

reality is more colorful

and filled with tiny irritations, apparently. What does my apparently fallacious statement have to do with what I was saying overall? You know, that a significant increase in the price of a key component of a product will increase the final price of the product, probably by a significant amount.
(I mean, it was obviously naive of me to think that you could characterize something businesses do as "buying on credit" - it's much better to use phrases such as "payment terms" and "financing" - and it's obviously foolish to think that a purchase using a cash payment in full would be cheaper than whatever payment terms they negotiate with their suppliers - and more directly silly of me to think that a company might need a line of credit or a loan to pay suppliers. A corporation would never have a line of credit or borrow money from a bank to make purchases to increase their production (for example) - they would make agreements that are advantageous to all parties....) (No, you can't simplify such things and say "cost of borrowing" or "buying on credit".)

 

[cmacd123]

Many business transactions are Net 30, 2% 10. so a 10,000 dollar order the buyer can pay 9,800 or so if they have the cash to pay in ten days, or they are expected to pay the whole 10K in 30 days. interest would be added after 30 days, and the seller might start withholding further shipments.

Larger companies will of course have the clout to arrange terms more favorable to themselves.

 

[koraks]

Larger companies will of course have the clout to arrange terms more favorable to themselves.

Well, yes - add to this that the kind of supply contracts between Harman and its silver supplier(s) are highly likely to involve specific arrangements pertaining to payment and delivery. The earlier suggestion that a rise in silver prices would translate into a meaningful increase in cost of capital to Harman is impossible to verify. It's an assumption that in turn relies on a host of implicit assumptions concerning the structure of these supply arrangements as well as Harman's financing structure. None of that is public, and there are plenty of possibilities (and compelling reasons!) to limit cost of capital under influence of market price fluctuations. Generally, changes in financing structure will have a more profound influence on this than market price fluctuations.

 

[MattKing]

Larger companies will of course have the clout to arrange terms more favorable to themselves.

This is part of the problem that Harman and Eastman Kodak and others have to deal with - on a relative scale, they are now often smaller companies, and have to compete against much larger customers to obtain what they need.
This was particularly challenging during the worst of Covid.

 

[cmacd123]

This is part of the problem that Harman and Eastman Kodak and others have to deal with - on a relative scale, they are now often smaller companies, and have to compete against much larger customers to obtain what they need.
This was particularly challenging during the worst of Covid.

yes, in the good old days, freight cars pulled up at Kodak with silver bars fresh from the vaults of Scotiabank. (based on some photos in "making Kodak film) Scotiabank is now out of the silver business, and Kodak is I understand buying silver nitrate as a commodity chemical.

 

[MattKing]

My grandfather was a truck driver for CN trucks, and my Dad, grandfather and grandmother lived in a little house in Toronto fairly close to the Kodak plant in Toronto.
Grandpa sometimes did deliveries to Kodak.
My Dad remembered as a young boy his Dad stopping at home on the way to Kodak, and being allowed to sit on the silver bar load in the freight area of the truck before Grandpa finished his delivery. I expect it was because Grandpa had stopped for lunch .

 

[Rrrgcy]

I’m crusty. Who are these market researchers and fortune tellers? About 1/3 of the article relies on comment and analysis from a “retired investment professional .” Retired. “Bambrough is a seasoned financial executive with more than a decade of investment industry experience.” Okayyyy. Ten years. And googling superficially shows around 2003-13. Without doing a lot more poking about than Instagram and X etc., doesn’t seem to be top-notch market analyzer, but what do I know. I suspect these guys and their opinions are dime-a-dozen w a lot of puff and tender associations to bolster resumes, true to some extent but puffed the same, to promote their after-retirement gig. I’ve seen enough in the financials expert arena on the other side to know a lot of industry-“aligned” hucksterism, and less than fully researched analysis, for a lot of motivations, but perhaps he’s more of a real deal. Plenty of articles out there about the larger potential impact on silver from declining U.S. Fed rate interest projections and general mining production deficits. Reminds me of the major golf magazines I subscribed to 20 years ago. Several. Each gave technique suggestions and protocols for improvement on various strokes and problems, yet each, from month to month varied widely and contradicted each other (sometimes in the same month). From “experts.”

Someone with ten years+ experience isn’t getting close to influence my spending and stocking habits.

 

[koraks]

Someone with ten years+ experience isn’t getting close to influence my spending and stocking habits.

No, but it's pretty much irrelevant whether it was a seasoned investment banker or a kid at the corner of the street who said this. The use of Ag-C interlayers is quite likely to see adoption and that will affect demand for silver given the fact that batteries constitute a massive market with equally massive growth potential. So the Bambrough guy is a sideshow; he's irrelevant.

 

[Rrrgcy]

“Quite likely” is a depends. I understand it’s the best anyone’s got. Much the article has you consider the sheer enormity of projected Kg use, thats the cudgel. Bambrough provides thesis caveats, I’ll give him that. So, yeah it depends. Without anything more factual, Egads. He doesn’t say where he gets the 5gram per cell figure. I’ve been reading and poking and seeing the battery interlayer of Ag-C of 5 microns (thick) per cell is alleged. Maybe that’s wrong. But share the sources. 5 microns. A sheet of paper is 100 microns thick. So the gram qty is dependent on the size of a cell. So, what’s that size and which vehicles and what’s your estimate? And where does he get 200 cells per EV car? A Hyundai Kona has 294 and Teslas vary 6,800-7,200+. So again, how do we get to 5 grams per car? So exactly who is Bambrough and these people Kitco decided to use - am I to buy your lemonade if you don’t share the ingredients? while it’s a light article, I still demand a little more (factual) meat on the table (if you’re (Kitco) there to influence people’s investing). Egads.

Other reports state these forms of cells are super expensive and infrastructure (even in China) doesn’t exist for the needed suitable SS cell charging as envisioned, and that “different” charging station will be very expensive - and it’s possibly a 20+ year forward plan to “get there.” Egads…

Reading Kitco’s article contributors, I’d say sure, Ag-C SS batteries look to possibly be a thing in a quasi future practical way which‘ll increase demand, to some level who knows what. Many co.’s are working on these types w soon achievements and releases so it may be a good bet If this is one industry improvement.

Listening to the proverbial kid on the corner, i‘ll agree it makes sense silver (and most precious metals) will exponentially increase in use-value hence cost which should affect silver demand industries. I’d love to hear from advisors to the film manufacturers about future price analysis.