South African miners face a conundrum: increasing palladium and rhodium output to take advantage of soaring prices risks depressing the already fragile market for sister metal platinum.
That is because palladium and rhodium are mined as byproducts, with every extra ounce of the former typically coming with two to three additional ounces of platinum.
Stricter emissions standards have boosted palladium and rhodium consumption in autocatalysts for gasoline vehicles. By contrast, the backlash against diesel vehicles, where most platinum is used, has seen the metal languish.
Consequently, some of the world’s biggest platinum miners, including Sibanye Gold Ltd and Impala Platinum Holdings Ltd, are loathe to boost production, even as palladium’s eight-year supply deficit could widen next year.
“They can’t increase production because the main metal is platinum and they don’t want to make the price come down,” said Rene Hochreiter, an analyst at Noah Capital Markets Ltd in Johannesburg.
Platinum has rallied 15 percent this year from a decade low, but demand is forecast to drop next year, pushing the market back into a surplus. Palladium has jumped 41 percent this year, while rhodium has surged 144 percent.
“Expanding production to try and benefit from higher rhodium and palladium prices can be quite risky,” said James Wellsted, a Johannesburg-based spokesman for Sibanye. “Most companies seem reluctant to raise production in South Africa due to the possible impact it will have on the platinum price.”
The rally in palladium and rhodium is extending the life of older shafts along Rustenburg’s platinum belt, but producers are not rushing to invest in new mines, Implats spokesman Johan Theron said.
Boosting production would make the platinum market “even more supplied,” he said.
Given the geological and market restraints, Implats expects output from South Africa’s mines to start declining over the next five years.
New projects in South Africa would take years to develop, while those in neighboring Zimbabwe might be stymied by political and economic uncertainty, he said.
Anglo American Platinum Ltd, the most profitable of South Africa’s producers, is expected to make a final decision on whether to expand its Mogalakwena mine at the end of next eyar, Anglo spokeswoman Jana Marais said.
Unusually, the company’s flagship mine produces more palladium than platinum, but Amplats must weigh the prospects for power supply from South Africa’s troubled state-owned utility before moving forward, she said.
MMC Norilsk Nickel PJSC is one company planning to boost supplies. The world’s top palladium producer said its platinum-group metals output could almost double by 2030.
Still, there is not enough metal in the near term to close the current supply gap, Sibanye chief executive officer Neal Froneman said last month.
Other commodities:
‧Spot gold edged up 0.2 percent to US$1,467.26 per ounce, but lost 0.08 percent for the week.
‧Iron ore climbed 1.8 percent to US$86.57 per tonne, gaining 3.99 percent for the week.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
From George Clooney to LeBron James, celebrities in the US have cashed in on tequila’s soaring popularity, but in Mexico, producers of the agave plant used to make the country’s most famous liquor are nursing a nasty hangover. Instead of bringing a long period of prosperity for farmers of the spiky succulent, the tequila boom has created a supply glut that sent agave prices slumping. Mexican tequila exports surged from 224 million liters in 2018 to a record 402 million last year, according to the Tequila Regulatory Council, which oversees qualification for the internationally recognized denomination of origin label. The US, Germany, Spain,
RSS