Miner to boost platinum output
The world’s biggest platinum miner will use a combination of extracting the best from its assets and game-changing technologies to step up production and remain cost-competitive in an increasingly positive market for platinum group metals.
The world’s biggest platinum miner will use a combination of extracting the best from its assets and game-changing technologies to step up production and remain cost-competitive in an increasingly positive market for platinum group metals.
Contrary to the negative sentiment on platinum, Anglo American Platinum (Amplats) sees a positive market developing for the metal as it is used to substitute more expensive and less available palladium used to make autocatalytic converters in petrol engines.
Palladium prices overtook those of platinum in 2018 and the gap is widening as demand for the metal outstrips supply, particularly as countries enact stricter emissions legislation.
A big jump in demand is expected from China in 2020 when it imposes tougher emissions regulations than Europe.
Palladium is trading at $650/oz higher than platinum, which is at $804/oz. However, Amplats foresees a time in 18 to 24 months when petrol autocatalyst makers use platinum, which is in a surplus position in world markets, said Amplats CEO Chris Griffith.
The palladium market received an inflow of nearly 600,000oz from exchangetraded funds and 300,000oz extra from Russia’s Norilsk, he said, adding that only 700,000oz of palladium remains in the exchange-traded funds, meaning that source could be relied on for only one more serious drawdown.
JP Morgan said it is concerned that a roughly 15% increase in the rand price for platinum group metals would result in mining companies scaling back plans to shut unprofitable or marginal mines, leading to a lower-for-longer platinum price scenario.
Refiner Heraeus said global palladium stocks have been estimated at between 10-million and 18-million ounces. However, it said there are still “several million ounces of metal held as liquid stock, so a chronic shortage is unlikely”.