THIS year’s Platinum Week conference in London in May was a turning point for platinum group metals (PGMs) and the miners, said Valterra Platinum CEO, Craig Miller.
Speaking at the London Indaba, a mining conference, Miller commented: “Platinum Week is an annual event and what typically happens is that the week thereafter platinum prices rise and then in the second week they actually fall.
“What is different this year is that platinum prices have continued to rise and are now trading at around $1,300/oz.”
Miller reckons the reason is that investors are starting to take on board the favourable fundamentals of the platinum market. This stands in sharp contrast to the negative scenario laid out by conference chairman Bernard Swanepoel when he initially questioned Miller about the new strength in the platinum markets.
Swanepoel queried: “For those of us a bit further away the EV (electric vehicle) trade is what it was; the jewellery trade could be better. Yet the narrative is somehow different. What happened?”
Said Miller: “The market is in deficit. Demand is much more robust than people were analysing and, as a consequence of lower supply and rising demand, you were going to see some price reaction.”
Demand had improved especially in China. Original equipment manufacturers had reduced inventories to “normalised levels” which combined with subdued EV demand is driving prices for platinum, palladium and rhodium higher, he said.
Turning specifically to EVs, Miller said market demand still overwhelmingly favours ICE (internal combustion engine) vehicles. EV sales in established markets such as the US, Europe, and Japan in 2024 were about 10% of the total market which was “barely higher” than in 2023.
He pointed out China was a unique exception where EVs accounted for about 25% of vehicle new sales.
“That led some to believe that what happened in China would take place in the rest of the world but China is unique. It does not have a long history of ICE vehicles ownership and it has rapidly invested in EV infrastructure. It has also benefited from the dense urbanisation and a reliable high-speed rail system,” said Miller.
But concerns about “range anxiety” in China had resulted in a rise in plug-in hybrids and other vehicles which still required PGMs, said Miller. This “speaks to our longer-term outlook on how the energy transition and adoption of EVs is likely to unfold.”
“We do not believe the EV growth will be as significant as forecast. ICE vehicles will remain dominant for longer than expected.”
Miller was also bullish over rising platinum jewellery demand in China with the gold price now three times higher than platinum.
“That creates an opportunity for platinum to regain lmarket share lost to white gold which was developed as a cheaper alternative to platinum. If platinum wins back just 10% of the white gold market demand could rise by a further 1.5 million ounces annually.”
Valterra is the former Anglo American Platinum which has now been unbundled from Anglo American. Swanepoel was quick to ask Miller: “How does it feel not to have to report to Duncan? (Wanblad, Anglo American’s CEO)”.
Miller avoided answering the question talking instead about how exciting the demerger had been and how good Valterra’s prospects were.
