The platinum group metals (PGM) market has been on a rollercoaster ride over the past three years, with prices plummeting and major players in the industry announcing significant restructuring measures.
South African miners, slow to react to the deflating bubble in PGM prices, are now feeling the pinch. Sibanye-Stillwater CEO Neal Froneman announced the possibility of closing the Stillwater mine in the US, while Impala Platinum and Anglo American Platinum have also announced job cuts affecting thousands of workers.
According to UK research consultancy Metals Focus, South African PGM miners have announced cuts totaling 500,000 ounces in production over the next five years, a number that could potentially triple in reality. Despite these harsh cost-cutting measures, there are signs of a potential market recovery.
Tharisa CEO Phoevos Pouroulis recently indicated that the bottom of the PGM market may have passed, with prices stabilizing and even showing some upward movement. However, caution remains key, as market volatility persists.
Investors are advised to remain cautious as PGM producers begin reporting their financial results, with expectations of a mixed performance across the board. There is a disconnect between spot market prices and supply-demand fundamentals, driven by factors such as growth in the futures market and the settlement of long-term contracts using spot prices.
While the automotive industry, a key driver of PGM demand, continues to show signs of weakness, there is hope for a potential turnaround in the market as global economic conditions improve. The future of the PGM market remains uncertain, but industry players are cautiously optimistic about a potential recovery in the near future.
