Urgent Price Update

 

Supply disruptions, mine closures and logistic stoppages have seen gold and silver refineries and mints around the world being shuttered, due to the Covid virus.  Bullion showrooms have been closed, and even online websites have suspended operations owing to lack of available metal.

As of last night (24th March 2020) platinum group metal liquidity in London dissapeared and spreads blew out, with extreme volatility to much higher prices due to the headline below….

The bid/offer spread between the buying and selling prices quoted in the interbank market is typically very tight. That trading spread has blown out and the lack of liquidity in the spot market has meant that market-makers are clearly reluctant to take on a trade. With physical supply much diminished and supply drying up rapidly.

 

Image

 

South Africa Goes into Lockdown

Platinum Group Metals Mine Production Halts !! 

South African President announced a 21-day lockdown for the country from midnight on Thursday, March 26, until Thursday, April 16. Our analysis on the ground in SA is pointing to this lockdown actually being extended……..

Impact on SA mines is likely to have a significant impact on PGM (Platinum Group metals) production for the duration of the lockdown and beyond:

  • The Implats are currently engaged in "detailed analysis and planning" related to the impact of the shutdown on the group
  • Royal Bafokeng Platinum (RBPlat) will be placing its operations under care and maintenance, with only essential services in place.
  • We believe Anglo American Platinum (Amplats) will announce the  same
  • We believe Northam Platinum will do the same
  • Sibanye-Stillwater
    Possible impact on US PGM operations: Blitz project capital spending to be assessed. Delay in project schedule. A force majeure notice from the manufacturer
  • of the mills to be used in the expansion of the concentrator. Therefore will not meet its target.
    I believe its SA operations will  be placed under care and maintenance for 21 days
  • Gold miner Harmony is placing its mines on care and maintenance for the duration of the lockdown.
  • AngloGold Ashanti also reported that it would temporarily suspend production from its South African operations for three weeks.

The landscape surrounding the risk to primary supply from the South African PGM mining industry is changing in our view, to the downside. The continuous the impact of electricity outages will impact supply (stage 4 outages in particular). These outages in our view, will not abate for at least five years. The reduction in Amplats production as a consequence a failure of its ACP reinforces the risk associated with South African mine production dependency on the primary supply of PGMs. Notwithstanding, the potential impact on production of COVID-19.

This action in our view be very positive for pgm prices moving forward.

 

--------------------------------------

If you need any advice or help in your metal allocations then just give us a call. 

   

Disclaimer : The information contained in this website should be used as general information only. It does not take into account the particular circumstances, investment objectives and needs for investment of any investor, or purport to be comprehensive or constitute investment advice and should not be relied upon as such. You should consult a financial adviser to help you form your own opinion of the information, and on whether the information is suitable for your individual needs and aims as an investor. You should consult appropriate professional advisers on any legal, taxation and accounting implications before making an investment.