Future of Platinum Uncertain, Analysts Say

In an article for the Mail and Guardian, Lisa Steyn notes varying opinions from mining companies and analysts as to the future of the platinum market. Specifically, following this years protracted strikes in South Africa, Anglo American Platinum (JSE:AMS) is looking to leave the space, while Northam Platinum (JSE:NHM) marketing manager Jerry White was confident that a deficit is on the horizon for the white metal, citing tighter emissions legislation as increasing the demand for platinum catalytic converters in vehicles.

As quoted in the publication:

But while Anglo wants out, others want in.

Most recently, the Public Investment Corporation, which manages money on behalf of the Government Employee Pension Fund and is the largest investment manager in Africa, is also keen on platinum – and putting its money where its mouth is.

However, analyst Michael Kavanagh of Noah Capital Markets said:

Margins are thin, balance sheets are stretched, there is not a lot of capital investment in the industry. So the expectation is that mine supply is not going to grow strongly, if at all,” Kavanagh said. “We are in a funny situation where virtually every company says supply [is] going to contract but ‘not us, we are going to expand.’

Click here to read the full article.