Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Due to ongoing supply concerns, platinum prices have surged more than 20% over the past three months, and the precious metal is now set to experience its best quarter since the start of 2009.
On Friday, platinum prices rose another 1.0% to $1,064.50 per ounce, bringing its quarterly gain to just under 23%.
Should the price of platinum maintain its 20% uptick, then this will will be the biggest quarterly increase since the first quarter of 2008, when it gained a staggering 34%.
According to the World Platinum Investment Council, top consumer China has imported excessive amounts of platinum metal since 2019, which has left a limited above-ground supply for the rest of the world.
“This, in combination with higher prices likely being needed to release Chinese inventories to the domestic market, could have a significant bearing on platinum market price discovery,” the Council wrote in its Platinum Perspectives report in December.
The Council is anticipating a platinum deficit in 2023, with demand growing by 19% while supply increasing by just 2%.
“Despite international economic turbulence, with many countries already in, or expected to tip into, recession, industrial demand for platinum will be up 10% compared to 2022, which exceeds the 10-year average,” WPIC said in a press release.
Demand for platinum in the automotive industry will also continue to grow next year, while jewelry-based demand for platinum is forecasted to remain constant throughout 2023, WPIC added.
According to Reuters data, platinum is by far the best-performing precious metal in 2022, recording a year-to-date gain of 9%. Over the same period, gold has lost around 1%, silver up around 3% and palladium down 4%.
(With files from Reuters)
Comments
Dr David Davis (Precious metal c0nsultant
“World Platinum Investment Council, top consumer China has imported excessive amounts of platinum metal since 20i9, which has left a limited above-ground supply for the rest of the world”. In Fact, China has been building strategic platinum stocks since 2009, where are their figures? In their Supply and Demand figures Q3 they report above-ground stocks of around 4.4moz (2022F) and completely disregard the “additional imports of platinum” in the supply equation. If they had included the additional imports platinum would now be in significant deficit. A conundrum which must be solved: mix and matching and disregarding doesn’t work!