Sibanye-Stillwater forecasts palladium supply deficit to vanish in three years

Charl Keyter, CFO, Sibanye-Stillwater

SIBANYE-Stillwater said an 800,000 ounce deficit in the palladium market could disappear by about 2024, bringing prices down, according to a report by BusinessLive.

“We are quite bullish on platinum. The opposite is true for palladium,” the publication quoted Charl Keyter, Sibanye-Stillwater CFO, of having said. Keyter said substitution and an increase in production by Russia’s Norilsk Nickel would hit demand and supply.

Keyter was speaking at an S&P Global Ratings SA in Focus virtual conference on Wednesday. Sibanye-Stillwater is bullish on rhodium and platinum, said BusinessLive.

Due to the persistent deficit of palladium for use in petrol-engine autocatalysts, compounded by flooding of mines owned by Norilsk Nickel, and platinum group metal (PGM) processing difficulties at Anglo American Platinum in 2020, there is a growing trend to partially substitute the metal with platinum, said BusinessLive.

This substitution would lead to demand for platinum in petrol autocatalysts growing to 200,000oz this year and to between 1.5 million and 1.7 million ounces by 2025, said Keyter. The use of platinum in hydrogen fuel cells, one of the green-energy solutions, will add demand of a further 400,000 oz by 2025, Keyter said.

The rhodium market, which has a deficit of about 10,000 oz a year, could balloon to a shortfall of 180,000 oz by 2025.

Speaking at an online conference hosted by South African asset management firm Ninety-One in May, Sibanye-Stillwater CEO, Neal Froneman, said the current market bull run in metals could eclipse the so-called supercycle of 2002 to 2008.

“We think fundamentals are better than previous cycles,” said Froneman. “There is more discipline shown by producers not to willy-nilly increase supply and upset the market.

“What happens in markets like this is companies lose control of their costs,” Froneman warned. “I believe that I have a good operational management team … [that] will ensure that doesn’t happen. There will be inflationary pressure, but we will do our best to maintain operational excellence.”