I think there is more to this than transportation. There are grounded planes everywhere and probably airline companies that would be grateful to be able to just fly the thing whatever was in it. Cargo planes are still flying, and passenger airlines have taken cargo where they can, but are they flying commodities at a price dictated to by a paper market that has disconnected to a certain extent from the physical side?
My take is, it is the delivery/insurance cost, not a shortage of transportation per se. The cost of the delivery/insurance could be outweighing the cost to transport the metal. This cost cannot easily be passed on to the buyer.
Forget retail selling. I wonder what price does a refiner sell to the LBMA. It cant be the paper price because LBMA are selling at that and they need their profit.
This is like Bairds selling to Chards, both need to make a profit and its achievable because the premiums reflect the costs. But can that be done when dealing with LBMA / Worldwide Distribution Companies who are in turn supplying mints/retailers are they on paper price contracts?
Lets guess that just 1 Metric Tonne is required to be delivered.
1 metric tonne is 32,150oz, at a current rate $1712 oz = $55,040,800
Lets say the normal delivery/insurance is 5% - $2,752,040
Now because of the current situation, delivery/insurance is now 15%
That is $8,256,120.
So the cost of the gold is now, $63,296,120 ($1968oz)
So can the refinery absorb the $5,504,080 additional delivery/insurance cost of this to keep a delivery date?
At our Silver Forum individual buyer level, we have seen changes of delivery terms and along with costs of shipping rising (ie GS.be £25) etc to the point of some of us saying shipping cost is too high to buy, is the same happening in the tonnage arena?
Lots of questions regarding this, way above my understanding, so any more info, much appreciated.