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Palladium Outlook 2022: Auto Demand to Determine Price Movement

Click here to read the previous palladium outlook.Palladium prices entered 2021 elevated by supply issues from the previous year, a factor that was further compounded by a resurgence in automotive demand amid historically low inventories.Tailwinds pushed.



Click here to read the previous palladium outlook.

Palladium prices entered 2021 elevated by supply issues from the previous year, a factor that was further compounded by a resurgence in automotive demand amid historically low inventories.

Tailwinds pushed prices from US$2,336 per ounce in January to an all-time high of US$2,842 at the end of April.

While lingering supply chain disruptions benefited the platinum-group metal during the first half of last year, values for the autocatalyst metal were pushed lower during H2.

“The rise in palladium prices in the first half of (2021) was predominantly due to expectations of supply tightness amid strengthening global economic activity and anticipation of a surge in palladium demand from the auto sector,” Steven Burke, economist at FocusEconomics, told the Investing News Network (INN).

“Prices peaked in early May, in tandem with global manufacturing PMIs, and have since trended lower — hitting the lowest level since early 2020 in recent weeks,” he added.

2021 palladium price performance

By the end of September, palladium prices had sunk to a year-to-date low of US$1,786. The metal, which had started Q3 at US$2,740, had shed 34 percent by the end of the quarter. At the end of December, palladium was still holding in the US$1,800 range, although it was some 21 percent lower than its January value.

 Palladium trends 2021: Supply surplus drags price lower

Optimism around economic recovery paired with a 2020 production curtailment at Anglo American Platinum’s (LSE:AAL,OTC Pink:AGPPF) South African operations aided in palladium’s H1 2021 price positivity.

As the semiconductor shortage stretched into the year, the palladium market, which had been in a supply deficit, swung into a surplus for the first time since 2010, according to Metals Focus consultant Dale Munro.

“Russia contributes around 40 percent of primary palladium mine supply,” he said via email. “Thus, the two major incidents at Nornickel (MCX:GMKN) in early 2020 — a concentrator building collapse and mine flooding — had a major impact on global supply, estimated to be around 400,000 ounces of production lost for the year.”

Residual supply issues out of Russia weren’t enough to offset rising production out of South Africa as Anglo American Platinum processed stockpiled ore.

“280,000 ounces of semi-finished inventory accumulated as a result of the Anglo converter plant shutdown in 2020, boosted country output,” Munro said. “In general, across all regions, mine operations were successful at navigating the COVID pandemic challenges with only marginal direct impact on production volumes.”

As South African miners upped output, they also benefited from higher prices early in the year. “Meanwhile, the high basket price, particularly from increased rhodium prices, pushed margins up and allowed miners operational flexibility to pursue higher-cost production,” Munro said. “This was particularly relevant in South Africa.”

With supply growing, prices were impacted by softening demand throughout H2 2021, particularly in the automotive industry. “The biggest factor that impacted palladium demand this year is the protracted and deepening chip shortage,” said Wilma Swarts, director of platinum-group metals at Metals Focus, in December. “Vehicle production forecasts for 2021 were cut by around 10 million vehicles from the start of the year until now.”

For his part, Ralph Aldis, portfolio manager at US Global Investors (NASDAQ:GROW), told INN that palladium's H2 decline was largely facilitated by reports of its substitution in the automotive industry.

“We've seen some stories where the auto industry is beginning the substitution process, and that is what's helping platinum a little bit, but it's coming at the expense of the palladium price,” he said.

Ironically, palladium became the automotive metal of choice to reduce emissions in catalytic converters when platinum prices trended into the US$1,000 per ounce range in the early 2000s. Now the industry is pivoting back to platinum after prices for palladium neared US$3,000 in April 2021.

Due to its close ties to the automotive sector, palladium also faced headwinds from the global semiconductor shortage, which has impeded growth across numerous sectors.

“The palladium prices drifted lower also on the back of auto demand being curtailed because of the chip shortage,” Aldis added. “So that was a knock-on effect for palladium there.”

Palladium outlook 2022: Chip shortage fueling uncertainty

It is estimated that the semiconductor shortage cost the global auto sector US$210 billion in lost revenue in 2021 as producers cut output by 13 percent.

“The ongoing semiconductor shortage has hammered auto production, and in turn demand for palladium, which has weighed on prices,” Burke of FocusEconomics explained to INN. “Given that the shortage of chips is expected to linger into (2022), demand for palladium from the auto sector should only rise at a modest pace (this year) — after declining markedly in 2021.”

While 2022 is expected to bring some relief in terms of the chip shortage, Burke noted that the auto sector sits near the bottom of the list in terms of importance to chip manufacturers.

“Without increased global capacity levels, the market will remain extremely tight and keep auto production relatively downbeat,” he said. “A major issue for securing semiconductors in the auto sector at the moment is linked to low margins for suppliers. Chip makers’ profit margins for supplying semiconductors to the auto industry are extremely low in comparison to other sectors and make up a small fraction of revenue, which makes them less attractive for suppliers to produce in the best of times.”

As a result, the chip issue is expected to be “a headache for automakers for the foreseeable future,” as further supply headwinds pose additional downside risks for the auto sector, and thus demand for palladium.

Metals Focus is a bit more optimistic, forecasting an uptick in both auto demand and production in 2022.

“From a demand perspective we are expecting a recovery in vehicle production, which will lift demand,” Swarts said. “However, the revised light-duty production forecast for 2022 is still well below the production forecast previously anticipated, and will accordingly still weigh on demand from the automotive sector.”

Palladium outlook 2022: Volatility to weigh on price growth 

By the end of December 2021, palladium prices had declined by 32 percent from July’s value of US$2,724. Prices for the metal continued to hold in the US$1,850 to US$1,900 range at the start of 2022.

Although vehicle manufacturing is anticipated to remain below pre-pandemic levels in 2022, Metals Focus is calling for palladium values to rise to a quarterly average of US$2,300 by Q4.

According to Munro, the move will likely be triggered by the replenishing of inventories, which will consume a majority of the surplus material. 2022’s forecast surplus could also be smaller than expected, as he pointed out.

“(2022’s) palladium mine supply is expected to increase on growth from Russia as Nornickel returns to full production,” he said. “Q1 is a seasonally weak quarter for South Africa due to the holiday season; however, annual output is expected to be broadly flat for the full year.”

The Metals Focus consultant continued, “Strong basket pricing is facilitating increased sustaining capital expenditure, which should help bring production stability. The ramp up of development projects is required to offset declining volumes from mature operations; these volumes are inherently more risked, so there is potential for some guidance misses.”

In the years ahead, new production will be key in meeting sector demand. For US Global Investors’ Aldis, this means looking to Australia — specifically, Chalice Mining (ASX:CHN,OTCQB:CGMLF), which Aldis noted has made a significant platinum, palladium, cobalt and nickel discovery at its Julimar project in Western Australia.

As South African operations age and Russian miners deal with issues around melting permafrost destabilizing infrastructure, these new discoveries will become more important in meeting future demand.

“You're going to have other sources of palladium to choose from in the future other than South Africa and Russia," said Aldis, also pointing to North American producers. “You've got several companies that are in that space actively trying to add more production or find a deposit that can be monetized somewhat.”

Echoing the forecast of Metals Focus, FocusEconomics is calling for palladium to average US$2,300 in 2022, a US$134 decline from 2021’s estimate of US$2,434.

“Substitution of palladium for platinum should outweigh substitution of rhodium for palladium,” Burke commented to INN. “Moreover, tepid demand from the auto sector and electric vehicles’ rising global share of automobile sales should weigh on palladium prices.”

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Webb Fontaine Announces Launch of Niger National Single Window (NNSW) to Bolster Trade

Webb Fontaine Announces Launch of Niger National Single Window (NNSW) to Bolster Trade
PR Newswire
DUBAI, UAE, Aug. 11, 2022

The launch is expected to bolster trade and increase the country’s revenues
DUBAI, UAE, Aug. 11, 2022 /PRNewswire/ — Web…



Webb Fontaine Announces Launch of Niger National Single Window (NNSW) to Bolster Trade

PR Newswire

The launch is expected to bolster trade and increase the country's revenues

DUBAI, UAE, Aug. 11, 2022 /PRNewswire/ -- Webb Fontaine and the Niger Chamber of Commerce and Industry, along with its partners, marked the launch of the Niger National Single Window platform through a ceremony held at the Chamber of Commerce and Industry of Niger. The Single Window platform will bolster foreign trade and increase Niger's revenues, while improving the overall speed and efficiency of trade. 

The event took place in the presence of Yayé Djibo, representing the office of the President of the Republic of Niger, Colonel Diori Hamani from the General Directorate of Customs and Ousmane Mahaman, Secretary General of the Chamber of Commerce and Industry of Niger (CCIN).

Created by decree n°2021-210/PRN/MF/MC/PSP on March 26, 2021, powered by Webb Fontaine's technology, NNSW provides a contactless, cashless, and paperless trade ecosystem reducing the time and cost of doing business for Niger traders and empowering them to compete globally.

The NNSW platform is capable of incorporating multiple processes related to the smooth operation of trade and Customs involving governmental and private organizations. The platform enables Niger traders to electronically connect with multiple governmental and non-governmental agencies involved in international trade to obtain the necessary licences, permits, certificates, and other trade documents required for international trade.

The development of the NNSW platform started in 2021 and is now operational with its first pre-clearance module.

"We are honoured to be the official technology partner of Niger, working in close collaboration with the Government to implement the Single Window for Trade. Webb Fontaine's latest technologies will help transform Niger's trade environment, modernising and streamlining all trade processes, while increasing trust amongst stakeholders".
Samy Zayani, Chief Commercial Officer, Webb Fontaine

The Niger trade community can now carry out clearance processes online, in an efficient and effective manner. The platform offers a single point of entry for all import, export, and transit operations in Niger.

"Webb Fontaine's goal and mission is to assist and train the trade community in using the new NNSW platform, and will soon open an internet centre to further power the adoption of the new platform".
Ali Karim Alio, Managing Director of Webb Fontaine Niger

"The Niger National Single Window is a much-awaited upgrade that will strengthen Niger's position as a trading partner and also bolster its international trade. The dematerialisation of trade procedures has become even more important in the post-COVID world as the pandemic has highlighted that the supply and logistics chains can bear the brunt of a global crisis and create newer crisis in its wake. It is crucial for Niger to work in tandem with other economies and grow its trade, the development of NNSW platform marks an important milestone for. I am delighted that Niger is joining the global trade movement".
Ousmane Mahaman, Secretary General of the Chamber of Commerce and Industry of Niger

NNSW can be accessed here

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Ivana Trump’s Money Lessons for Older Americans.

Ivana Trump, the first wife of Donald Trump, was recently found dead in her Manhattan residence. She was 73.

Known throughout her life as a dynamo socialite…



Ivana Trump, the first wife of Donald Trump, was recently found dead in her Manhattan residence. She was 73.

Known throughout her life as a dynamo socialite and dealmaker in heels, her death from a blunt trauma from a fall down the stairs in her multi-story townhome, was a shock to residents who perceived her as vibrant and full of life. So, her passing got me thinking about Ivana Trump’s money lessons for older Americans.

Listen, it’s tough to age, but don’t let the process get you down. It’s too hard to get back up! Get it?

Seriously, a great challenge is an acceptance of growing older. Aging can be a tough pill to swallow. Especially for those who are known for the travails of their younger days. I have friends who explain as they age, they ‘disappear.’ I hate to hear this.

Personally, I’m living my best self and wouldn’t change a thing. However, Ageism is a real societal challenge. Based on numerous surveys, white papers, and reports from health organizations, those who are 60 and older are subject to negative stereotyping and discrimination in the workplace. Also, to younger generations, they do disappear in a manner of speaking.

But I have news for you. I think that’s about to change for you ‘seasoned’ folks.

During the pandemic, the Labor Force Participation Rate collapsed and has yet to recover. For those who need a reminder, the LFPR represents the people age 16 and older employed or seeking employment. Older Americans decided to accelerate retirement. Younger cohorts decided to go out on their own or sit back – satiated by government stimulus.

I think many older Americans will seek to unravel their retirement decision and return to the workforce. Also, I believe they’ll be welcomed with open arms by employers eager for a generation that is timely, responsible, and willing to work!

Let’s kick Ageism where it hurts. Right in the work ethic!

One money lesson I’ve learned from Ivana Trump about older Americans is that the entire world is wrinkling.

According to Peter Zeihan in his latest book – The End of The World is just the Beginning, population, and spending shrinkages are realities the entire globe must embrace. Demographics outline that mass-consumption-driven economies have already peaked.

By 2030, the world will be populated with twice as many retirees. Therefore, we all better internalize the fact that we’re getting older and financially and emotionally prepare accordingly. Long-term, poor demographics are deflationary.

In my opinion, Ivana Trump refused to accept aging. Thus, I consider Ivana Trump’s money lessons for older Americans applicable to all of us. 

Regardless of her immense wealth, she must have encountered anguish when it comes to getting older. Sure having money doesn’t hurt. Suffering in luxury isn’t bad. However, aging doesn’t care about a net worth statement.

Denial of aging is real and one of Ivana Trump’s best money lessons for older Americans.

Who needs comprehensive studies to understand that denial of getting older is a reality? I see it in myself as I dramatically changed my diet and amped up my physical workouts years ago to fight or slow the inevitable.

Frankly, my graying hairline stresses me out. 

I engage with people regularly who aren’t ready to deal with how someday they may move slower, forget things often and work through periodic illness or injury. Older clients and their adult children have a tough time facing that mom and dad are grayer, smaller, and frailer than they used to be.

Per a July 2022 analysis from the Center for Retirement Research, older Americans and retirees poorly assess the risks they face in retirement. Health and longevity risks (the risk of living longer than expected and exhausting financial resources) are underestimated.

Per the study: Perceived longevity risk and health risk rank lower because retirees are pessimistic about their survival probabilities and often underestimate their health costs in late life.

I cannot tell you how many clients inform me how sure they are about dying early. How do they know? So, I always ask the following question –

“What if you don’t?”

Ivana Trump’s friends were concerned about her home’s beautiful but dangerous staircase. They were worried about her falling. She had an elevator and rarely used it. The stairs at her home were steep, the carpet was worn. Although she had trouble walking, she regularly took the stairs. She had the money to remove or replace the carpet; the elevator would have been perfect, but she rarely used it.


In her halcyon days, Ivana was New York royalty. Young, vibrant. She could accomplish anything. How can someone like that stare into the mirror and face vincibility? How can you? Can I? Acceptance is the first step to a rich life as we age, to feel comfortable in different but richer skins.

That acceptance opens the door to preparation – eating right, exercising regularly, and preparing for the risks of aging through comprehensive planning and open communication with family and friends.

If I deny aging, then I’ll force everyone around me to deny it too. Or, at the least, family members and friends will discuss issues concerning me behind my back. Who wants that? Older Americans must be open to listening.

This leads to my next financial lesson for older Americans from Ivana Trump.

Communication. Another one of the money lessons Ivana Trump has for older Americans.

I wonder how many times Ivana was advised (perhaps delicately) by Ivanka and the other kids to update her place for aging, move to a one-story, or take the damn elevator. Whatever it is, would Ivana listen or just carry on like it was the 1980s? In her mind, it may have been decades ago, but her aging body lived in the here and now.

There’s a nuance and empathy to communicating with older loved ones.

Remember, they were young like you once. Listen to your special older Americans. Never be condescending. A good idea may be to bring in an objective third party such as your financial advisor to assist with the discussions. I’ve witnessed adult children infantilize their parents, and that never works. Imagine approaching Ivana with that tone! Not good!

Remember, even mild cognitive impairment can drive a communication wedge between you, and your aging loved one. However, don’t give up sparking conversation. I work with clients who consistently need to nuance their speech with their parents. They get their points across eventually. Impaired older relatives eventually take action, but the process is like chipping away at an iceberg with a butter knife.

Don’t give up!

Genworth, a leader in long-term care insurance and research, maintains an impactful Conversation Starters page with helpful tips about what to talk about and how to maintain a dialogue. Check it out.

Use your financial plan to motivate others.

How can you discuss long-term care issues with loved ones if you’re personally in denial about aging? A risk mitigation plan as part of a comprehensive financial strategy validates your commitment to preparation. Actions forge your conversations with credibility.

According to AARP’s most recent Home and Community Preference Survey, 77% of adults 50 and older want to remain in their homes or age in place. The number has been consistent for over a decade. Aging in place requires planning – whether it’s to eventually downsize to a one-story home, renovate kitchen and baths or install easy access ramps for items of mobility such as wheelchairs. It would be worth practicing financial openness and sharing this information with aging parents. In other words, if you’re preparing for these expenses, they should be too.

Don’t forget long-term care insurance as one of Ivana Trump’s money lessons for older Americans.

Ivana didn’t need long-term care insurance. You probably need to consider it.

Unfortunately, nearly half of individuals who apply for traditional long-term care insurance after age 70 have their applications declined by an insurer, according to Jesse Slome, director of the American Association for Long-Term Care Insurance. However, loved ones in good health in their 50s and 60s can still consider long-term care insurance. The sweet spot for looking into long-term care coverage is generally between ages 55 and 65, per Jesse Slome.

Three out of every five financial plans I create reflect deficiencies in meeting long-term care expenses. Medical insurance like Medicare does not cover long-term care expenses – a common misperception. Nearly 60% of people surveyed in various studies falsely believe that Medicare covers long-term care expenses.

The Genworth Cost of Care Survey has been tracking long-term care costs across 440 regions across the United States since 2004.

Genworth’s results assume an annual 3% inflation rate. In today’s dollars, a home-health aide who assists with cleaning, cooking, and other responsibilities for those who seek to age in place or require temporary assistance with daily living activities can cost over $54,912 a year in the Houston area. We use a 4.25-4.5% inflation rate for financial planning purposes to reflect recent median annual costs for assisted living and nursing home care. Candidly, I fear that I’ll need to increase this inflation rate in 2023.

As I examine long-term care policies issued recently vs. those 10 years or later, it’s glaringly obvious that coverage isn’t as comprehensive, and costs are more prohibitive.

One option is to consider a reverse mortgage, specifically a home equity conversion mortgage. The horror stories about these products are overblown. The most astute planners and academics understand how incorporating the equity from a primary residence in a retirement income strategy can help with the burden of long-term care costs. Those who talk down these products are speaking out of lack of knowledge and falling easily for pervasive false narratives.

Reverse mortgages have several layers of costs (nothing like they were in the past), and it pays for consumers to shop around for the best deals. Also, to qualify for a reverse mortgage, the homeowner must be 62, the home must be a primary residence, and the debt limited to mortgage debt. There are several ways to receive payouts.

One of the smartest strategies is to establish a reverse mortgage line of credit at age 62, leave it untapped, and allow it to grow along with the home’s value. 

The line may be tapped for long-term care expenses if needed or to mitigate the sequence of poor return risk in portfolios. Simply, in years where portfolios are down, the reverse mortgage line is used for income while portfolios recover. Once assets recover, rebalancing proceeds or gains may be used to repay the reverse mortgage loan, restoring the line of credit.

RIA’s approach to helping older Americans age comfortably in place.

Our planning software allows our team to consider a reverse mortgage in the analysis. Those plans have a high probability of success. We explain that income is as necessary as water regarding retirement. For many retirees, converting the glacier of a home into the water of income using a reverse mortgage will be required for retirement survival and especially long-term care expenses.

Ivana Trump’s money lessons for older Americans are lessons for us all, regardless of age.

Planning to age gracefully and healthfully will lead to a prosperous retirement attitude.

As George Burns said: You can’t help getting older, but you don’t have to get old.

The longer I live, the more I realize how true that quote is.

The post Ivana Trump’s Money Lessons for Older Americans. appeared first on RIA.

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Is housing inventory growth really slowing down?

The problem with new listings declining now is what will happen if mortgage rates make a solid push lower.
The post Is housing inventory growth really…



One of the most important housing market stories in recent weeks has been the decline in new listings, which has slowed the growth rate of total inventory. What does this mean? Some have said this is evidence of a soft landing for housing since we are in August and it doesn’t look like we are going to even get to the peak inventory levels we saw in 2019 this year, or even breach the lower levels of 2019 on the national data.

From the National Association of Realtors:

What I want to talk about is the concern I’ve had throughout this post-COVID-19 housing market: When will we get total inventory back into a range of 1.52 million to 1.93 million? Once that happens, I can finally take the savagely unhealthy housing market theme  off my talking points.

First let’s take a look at the data.




Altos Research:


Clearly, we are seeing a slowdown in new listings as the data has been negative now for months. One thing that I have stressed is that higher mortgage rates can create a slowdown in demand and thus allow more inventory to accumulate through a weakness in demand. After March of this year when rates were rising, this was the case, especially when rates ranged between 5% to 6%. Inventory growth is happening much like we saw in 2014 — the last time total inventory grew — which was also the last time mortgage purchase application data went negative year over year. 

However, inventory accumulation due to weakness in demand is only one of many ways to see inventory increase. If you really want to see inventory grow to 2019, 2016, 2014 or even 2012 levels, you need a healthy amount of new listing growth each year. We aren’t talking forced sellers, foreclosures or even short sellers. With just traditional new listings and with higher rates and time, we should be able to hit peak 2019 inventory levels. 

The problem with new listings declining now is what will happen if mortgage rates make a solid push lower. At that point housing inventory could slow even more, pause, and in some cases fall again due to demand. If mortgage rates peaked at 6.25% or 6.50%, that means that the next big move should be lower and that is a risk to getting balance back into the system.

How low do rates need to go?

Mortgage rates have made a move of 1.25% in recent week and I have talked about how low they need to go to make a material shift in the markets. Looking at the most recent mortgage purchase application data, I haven’t seen anything yet to show that demand is coming back in the meaningful way. In fact the recent data shows that even though we saw a positive 1% move week to week, the year-over-year data is still down 19%.


So as of now, the growth rate of inventory slowing down is a supply issue more than demand picking up in a meaningful way. This is why if rates do fall, we will have more supply and more choices for borrowers, who in some areas won’t have to get into a bidding war for a home. This is something I will be keeping an eye on for the rest of the year, since I do have all six of my recession red flags up, which historically means that rates and bond yields fall.

Two things that I believe are key for a soft landing are rates falling to get housing back in line and inflation growth falling so the Fed can stop with the rate hikes and start cutting rates if the economic data gets even worse.


The recent inflation data did surprise the downside a bit, sending the bond market rallying, stocks higher and mortgage rates falling.


However, we are far from calling it a victory as inflation growth rate is still very high and we do have some variables that can create supply shortages, such as war and aggression by other countries. 

For today, people cheered the growth rate of inflation falling as they know this is the biggest driver of the Federal Reserve’s hawkish tone and more aggressive rate hikes. Also, in general, the mood of Americans is much better when gasoline prices are falling and not rising. However, we need much more aggressive monthly prints heading lower for the Fed to be convinced that inflation is no longer a concern. 

All in all, the decline in new listings does warrant a conversation on how much more growth we will see for the rest of the year. Inventory data is very seasonal and traditionally we see inventory start to fall in October as people start getting ready for the holidays and the New Year, and then in the spring and summer inventory pops up again.

I would remind everyone that the growth rate of inventory, working from all-time lows, was aggressive in the last few months, so some context is needed if we do see some weekly declines in inventory during the summer months. For now, this is due to a lack of new sellers rather than demand picking up. If demand starts to pick up due to falling rates, that is an entirely different conversation we will have, but we haven’t crossed that bridge yet. 

Just remember that American homeowners are just in much better shape these days.


I know the professional grift online since October of 2021 was that a massive wave of millions of people were going to list their homes to sell at any cost to get out before the housing market crashed. 

However, homeowners don’t operate this way. A traditional home seller is a natural homebuyer, buying another property when they sell. They don’t sell their house to be homeless or purposely sell to rent at a higher cost for no good reason. If we get a job loss recession we can have a further discussion of credit risk profiles, but for now, it shouldn’t be too shocking that new listings are declining, except for the fact it’s happening sooner than later in the year.

The post Is housing inventory growth really slowing down? appeared first on HousingWire.

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