Page 55 from: March 2013
P l a t i n u m G r o u P m e t a l s
Highlights for palladium
• Sizeable decreases in primary supplies from
South Africa and stable output from Norilsk
should keep the palladium market in deficit
this year and move prices higher.
• Reports of further declines in Russian stock
sales support firmer prices.
• Continued strength in global vehicle sales
should sustain the greater demand for pal-
ladium.
• With help from the global economy, the
metal’s price could reach US$ 800-825 per
ounce this year.
$990
$870
$750
$630
$510
$390
$270
$150
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Palladium Price
Highlights for platinum
• Production losses in South Africa owing to
labour disruptions and mine closures push the
platinum market into deficit, supporting
higher prices.
• Positive economic data flowing from China
and the USA bode well for global recovery
and demand for commodities.
• Continued weakness in European car sales
and mediocre growth in prospective jewellery
sales could temper physical demand.
• A price high of US$ 1800-1850 an ounce is
anticipated in 2013
$2,350
$2,150
$1,950
$1,750
$1,550
$1,350
$1,150
$950
$750
Platinum Price
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Highlights for rhodium
• Loss of primary supplies could spur further
speculative interest in rhodium.
• Implementation of Euro 6 and Euro VI stan-
dards should bolster rhodium demand.
• The lack of any noticeable improvement in
industrial demand could limit rhodium price
gains.
• Recent low prices may prove to be a trough
for 2013.
$10,000
$9,000
$7,000
$5,000
$3,000
$1,000
$8,000
$6,000
$4,000
$2,000
$0
Rhodium Price
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The palladium price can be expected to increase
still further in the months ahead, particularly
with the loss of supply from Russian stocks and
the potential for more unrest in South Africa.
If the recovery in the Chinese and wider global
economy continues, this would support an
appreciation in the price to US$ 800-825 per
ounce.
In common with platinum, palladium is
attracting a high level of speculative interest
which will continue to overhang the markets.
Weak rhodium demand
Recently, rhodium has traded up to US$ 1175
an ounce, gaining more than US$ 100 in Janu-
ary – apparently in response to the announce-
ment from Anglo Platinum that it would be
reducing its PGM production. At current pro-
duction rates, this cut in output could equate
to as much as 40 000 ounces of rhodium each
year, or about 5% of current primary supplies.
In addition, other mine closures in South Afri-
ca resulting from the series of strike actions that
affected the platinum sector in 2012 could
reduce rhodium supplies by a further 30 000
ounces annually.
The implementation of Euro 6 standards for
cars and light trucks and Euro VI standards for
heavier trucks in 2013/14 is expected to have a
positive impact on rhodium consumption.
Scheduled to come into effect on September 1
2014, Euro 6 regulations stipulate a 50% reduc-
tion in emissions of nitrogen oxides to 80 mg
per kilometre; meanwhile, the Euro VI stand-
ards which came into force in January this year
call for an 80% cut in nitrogen oxide emissions
and a 66% reduction in particulate matter emis-
sions in heavy-duty vehicles. Rhodium is essen-
tial in the control of nitrogen oxide emissions.
A market surplus continues to limit any signifi-
cant recovery in rhodium. Prices have traded
either side of US$ 1100 an ounce for most of the
past six months in response to continued low
volumes, finding support above the 2008 lows
of just under US$ 1000 an ounce which may also
prove to be the nadir for 2013. Despite a possible
deficit this year in rhodium supply, physical
demand for the metal remains weak. And with
the continued decline in European vehicle sales,
particularly in the diesel market, rhodium
offtake is not expected to show any significant
improvement in the near term at least.
For more information:
A-1 Specialized Services & Supplies of Croydon,
Pennsylvania, USA, has two principal lines of
business: processing salvage automotive catalytic
converters obtained from dismantlers, scrap
yards, parts dealers and manufacturers in order to
recover platinum, palladium and rhodium; and
the marketing and sale to consumers of these
same metals in commodity-grade form.
For more information, visit:
www.a-1specialized.com
perhaps more than 200 000 ounces of output
this year given its current mining profile. South
African supplies of palladium may have already
declined by as much as 250 000 ounces as a
result of the industry-wide strikes last year and
a number of other mine closures owing to pro-
hibitive cost escalation.
In addition to the loss of primary supplies from
South Africa, recent comments from Norilsk in
Russia have again highlighted the fact that the
offloading of state stocks of palladium may
finally be nearing completion following several
years of speculation that sales were coming to
an end. Norilsk estimates that perhaps as little
as 100 000 ounces of palladium remains for
possible sale to the market this year. Moreover,
at 2.7-2.8 million ounces, primary supplies of
palladium from the company are projected to
show only flat to modest growth for 2013.
Platinum ore on the conveyor belt at the Impala Platinum mine at
Rustenburg, South Africa.
RI_2-PGM.indd 55 06-03-13 09:20
