South African PGMs industry risks upsetting global market dynamics
ensurING a sustainable platinum group metals (PGMs) market would require South Africa to balance its market in line with global supply, Sibanye-Stillwater business development executive VP Richard Stewart told delegates at the PGMs Industry Day, held in Johannesburg, last week.
Dubbing the market “a real basket case”, he explained that, considering market forces, the PGMs industry was “at real risk” of permanently upsetting market dynamics through dwindling demand for palladium and an oversupply of platinum.
The South African market needed to adapt to a world that was undergoing change, Stewart told delegates, warning that “the market development solutions that created yesterday’s demand are not going to be the same solutions for tomorrow”.
Thus, South Africa needed a “dynamic structure” with the ability to adapt to the changing demand environment, he stated.
SFA Oxford director and chairperson Stephen Forrest shared a similar sentiment in a separate presentation, in which he stated that South Africa was “essentially unguarded” in the PGMs marketplace.
He highlighted the need for South African producers to adapt to market conditions at a faster rate.
According to Forrest, future demand did not favour the South African mix of palladium (34%), rhodium (8%) and platinum (58%). Instead, the market was leaning towards demand of between 56% and 60% for palladium, between 30% and 40% for platinum and 6% for rhodium.
During his presentation, Stewart also touched on palladium supply, which is expected to remain flat with a marginal increase in line with a declining South African production. This was, in turn, offset by an increased Russian production, he added, as well as a net increase in North America, owing to Sibanye's Blitz operation ramping up.
Secondary supply, meanwhile, is expected to continue growing as the life cycle of petrol cars begins to impact on recycling numbers.
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