Implats draws comfort from “shifts” in metal demand

Nico Muller, CEO, Impala Platinum

IMPALA Platinum (Implats) kept to its 2025 production forecast and said shifts in metal demand among customers supported its view on market trends.

Commenting in its first quarter production report on Wednesday, the platinum group metal miner also said demand from its customers was robust.

“Healthy ongoing metal purchases and recent discussions with our core customer base confirm our view of robust demand for our key products over the coming year, with shifts in metal requirements also affirming our assessment of underlying market trends,” said Nico Muller, CEO of Implats.

Asked for detail on what is meant by “shifts”, Johan Theron, Implats head of corporate affairs and strategy, replied: “We are seeing customers asking for more metal contractually than last year – specifically palladium and rhodium.

“This suggests that after the recent big price drop and inevitable stock liquidation, metal availability is getting tighter again”.

PGM prices have tended to perplex the market because although some metals are in a supply deficit their prices are subdued, partly owing to economic uncertainty on issues such as vehicle demand for battery electric and internal combustion cars.

Muller said the global economic outlook remained uncertain enough to keep treading cautiously. “The macroeconomic and geopolitical uncertainty that has typified the global outlook for much of the past two years has persisted,” he said.

Muller said in September the PGM market was anxious to see the US Federal Reserve make the first move by cutting rates, which is consequently did, by 50 basis points. “Our view is that PGM prices are not driven only by market fundamentals but by global economic sentiment,” Muller said at the time.

While more rate cuts are likely as inflation shows further signs of becalming, PGM prices have started to improve – but look well short of the record levels they achieved in 2022, when palladium broke through $3,000 per ounce. The platinum price is 9% higher in the last three months while palladium is nearly 39% higher but 38% down over three years.

First quarter refined production totalled 807,000 oz (6E), a 9% decline quarter-on-quarter while sales were 4% lower at 792 000 oz.

Production of concentrate was 5% lower in the first quarter at some 947 000 oz while volumes from mines Implats directly manages fell 6% to 751 000 oz. The latter was affected by the commissioning of a smelter expansion at Zimplats in Zimbabwe, and restructuring at Marula.

There was also restructuring at Two Rivers, which Implats shares with African Rainbow Minerals and where the Merensky expansion project was recently shelved. Implats has also adjusted its mining approach at Lac des Illes (Implats Canada) which is being mined for higher grades for the remainder of its economic life.

All in all, Implats said it was on course to meet group 6E refined and saleable production of between 3.45 million and 3.65 million oz as guided previously. Group unit costs for the year  were also guided to rise by up to 5% to be between R21 000 and R22 000 per 6E oz, on a stock-adjusted basis.