Implats warns of platinum deficit

2012-11-12 07:19

Hong Kong - Impala Platinum [JSE:IMP], the world's No 2 platinum producer, expects the market for the precious metal with industrial uses to be in deficit for 2012 and the next few years, a company official said on Monday.

Derek Engelbrecht, Impala group executive for marketing, also said he expected lower output and job cuts as a result of rising costs and a drop in platinum productivity.   

"We think the market is in fact moving into deficit this year, based on a significant decline in South African supply and a small reduction of jewellery being recycled because of lower prices," he told a conference in Hong Kong.

"With relatively stable demand, it will push the market into deficit. We believe that will continue for the next few years, again based on lower supply from South Africa, and we also believe the automotive industry is growing."

China, the world's largest platinum jewellery market, could see flat demand this year, although small growth was expected going forward, he added.

Speaking about months-long labour tensions in the industry in South Africa, Engelbrecht said the government was unlikely to take steps to ease the strife ahead of a key conference of the African National Congress (ANC) set to take place next month.

"The situation is still quite volatile," Engelbrecht said.

"We believe it's not just linked to higher wages. We think there's another agenda, possibly some kind of political agenda. We can't be 100% certain on that or who's behind it, or if the motive is to delink the unions from the ruling party."

Engelbrecht said the government may not take significant measures even after the ANC conference to avoid upsetting their alliance parties.

Labour strife in South Africa's mining sector has supported platinum prices, at a time when uncertainty in the outlook for the global economy is weighing on demand for the metal mainly used in jewellery and autocatalyst production.

The unrest in South Africa could continue to push up mining costs and force miners to start trimming their output, he said.

"Mining inflation in South Africa has been running at somewhere between 12% to 15%. Compounding the inflation environment, the productivity has in fact been declining slightly. It's not a very good combination," Engelbrecht said.

  • altus.kirsten - 2012-11-12 07:29

    The same applies for agriculture. Jobs will be lost as a result. Just what Cosatu and ANC wanted!

      gary.desousa.7 - 2012-11-12 07:44

      Yes it seems there is a deliberate move to de stabilize certain sectors and then the socialists/commies can move in with nationalization and look like the savior.

  • george.larkins.14 - 2012-11-12 08:10

    Can not trust ANC and its Allies.They dont worry about the people,they act only to benefit themselves.

  • glen.e.huysamer - 2012-11-12 08:52

    If they have not noticed that the delinking of the Unions is already occurring, it is happening and the ANC will lose their power hold over the working electorate... the scum buckets did the same as the Nats did and sold the labour cheaply, in order to line their personel pockets, thereby selling South African minerals cheaply to foreign interests, now we will see the price of minerals reach a proper market related price, (like oil---) in the long run this will be better for South Africa turning mining into a decently payed career, and not some cheap labour trap for the rural-undereducated (A rural underclass which the ANC further propagates by supplying worse education than the previous Bantu education the the NATs provided) The ANC/Alliance has been caught with their finger in the pie, selling hate towards the minority white in order to keep the working electorate distracted from the reality that their new master is their ANC elitist comrades who sell them as slaves.

  • butch.poulter - 2012-11-12 08:57

    It actually loks like the Anc their cronies are trying to destroy this country on purpose.

  • willem.louw.16 - 2012-11-12 08:58

    Oh here we go, production cost is on the increase, inflation is on the up, but through put and productivity is down. So let me get this straight. We kill and plunder to earn 3 times what we are earning now and therefor we offer less work in return... Well done ANC... 100% logical and sustainable

  • Michel Lafon - 2012-11-12 09:02

    decent conditions for workers including salaries are not negotiable. companies are not merely for management and owners. otherwise let platinum stay where it is

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