[meteorite-list] Opinion of Current Trends in Meteorite Prices

From: Matson, Robert <ROBERT.D.MATSON_at_meteoritecentral.com>
Date: Thu Apr 22 09:48:56 2004
Message-ID: <AF564D2B9D91D411B9FE00508BF1C8698E5662_at_US-Torrance.mail.saic.com>

Hi Mark,

As with all investments, there is a trade-off between risk
and reward, supply and demand. Commodities markets tend to
be very risky, since their supplies are often unpredictable,
and their demand can be equally so. Think about gold, the
traditional hedge against inflation. For the last decade,
gold has been a horrible investment.

Meteorites are a particularly risky "investment" because of
the extremely limited demand. Granted, the supply is also
very limited, but in the last couple years that supply has
skyrocketed due to Northwest Africa. Demand has gone up
also, but not nearly as much as the supply. The effect is
the same as if DeBeers were to dump a multi-years' supply of
diamonds on the open market. Prices plummet.

You mentioned Brahin in particular. You wouldn't think that
Brahin's price would be affected by NWAs, since I'm not aware
of any new NWA pallasites. Brahin is a special case, however,
because a lot of new Brahin material has flooded the market
in the last year. Once again, supply and demand.

> Where does everyone see this going? Are prices going to continue to
> plummet? Does anyone think there is a bottom to all of it, afterall there
> will be a limit to the supply.

You can probably answer your own question on this one by
thinking about your own meteorites. I imagine that for
each of your specimens you could come up with a price,
below which you would not be willing to part with it.
This effectively places a lower bound on prices. If
sellers don't like the prices they're being offered,
they'll simply sit on the meteorites.

Outside of intrinsic value, meteorites also have a recovery
cost associated with them. Those recovery costs may be
relatively low (at the present time) in the western Sahara,
but not in most parts of the world. Anyone who has spent
some time personally hunting for meteorites knows that when
the labor and expenses that went into recovering their finds
is divided by the masses of those finds, the resulting $/gram
far exceeds the going rate for unclassified NWA chondrites.

> ... with stock market pitching and heaving I thought it would be a good
> time to buy some nice meteorites, and sit on them for future sales. But in
> the last year the price trends even in this market seem to be on the way
> down. Some of the better stones are selling for a tenth of what they were
> selling for last year.

It would probably be an interesting exercise to do a study
of meteorite price stability by type, TKW, place of origin,
and whatever other categories you can come up with. Prices
based on type alone are sure to show a bad trend over the
last couple years, since NWA has boosted the supplies of
nearly all meteorite types. On the other hand, certain
distinctive meteorites will continue to hold their market
value due to their uniqueness. Let's face it, there's
only so much Esquel and Tagish Lake to go around, just as
there's only so much NWA 481.

Cheers,
Rob
Received on Wed 05 Sep 2001 07:30:56 PM PDT