Platinum price may rise 80%

The world’s number 1 platinum miner says the price of the metal could climb more than 80% over the next four to five years as the global economy recovers and supply dwindles.

That forecast comes as demand for platinum-group metals has already rebounded to pre-pandemic levels, Sibanye Stillwater CEO Neal Froneman said in an interview.

Platinum has almost doubled from an 18-year low in March amid supply disruptions and a revival in China’s auto industry, which uses the metal in pollution-control devices. “Platinum has only just started to re-rate and it will continue,” Froneman said. “There is no reason why platinum will not eventually trade at $2 000 an ounce and probably even higher.”

When the South African dealmaker acquired Stillwater Mining Co four years ago, critics said he had overpaid for the US palladium producer. Since then, the price of palladium has almost quadrupled, allowing Sibanye to resume dividends and repay debt.

Platinum will be supported by its increasing use in hydrogen fuel cells, while automakers in China and North America are starting to switch the metal in for more expensive palladium in autocatalysts, Froneman said.

New technology developed by BASF SE — with backing from Sibanye and Impala Platinum — to partially replace palladium in autocatalysts could boost platinum demand by at least 300 000 ounces a year, he said.

Froneman isn’t alone in his optimism for platinum. The metal could trade at around $1 500 an ounce in 2022, according to Georgette Boele, a senior precious metals strategist at ABN Amro Bank.

As for rhodium, the world’s priciest precious metal that extended record gains on Friday, its rally could continue, Froneman said. Rhodium has gained 23% this year, according to Johnson Matthey Plc data.