A chemicals and precious metals multinational says excess supply means platinum miners are suffering more from the work stoppage than buyers are.
Johnson Matthey said supplies of platinum held by jewellers and exchange-traded investments are helping prevent shortages of the metal and curbing price gains amid a four-month strike that’s crippled South African output.
“Our access to platinum and palladium is still reasonably good,” Johnson Matthey finance director Robert MacLeod said by phone. “There’s plenty of metal around for industrial users. The miners are more impacted than we are.”
The company, maker of a third of all auto catalysts that use platinum to cut pollution from cars, today reported a 25% gain in annual net income to 340.2-million pounds, on rising use of the devices in the US and Asia. It posted underlying profit before tax of 427.3-million pounds, above the average analyst estimate of 416.8-million pounds.
A strike by more than 70 000 workers at Anglo American Platinum, Impala Platinum Holdings and Lonmin, the three biggest miners, has disrupted output since January 23. Demand will exceed supply by 1.22-million ounces this year, the biggest gap in more than three decades, given the strike and growing consumption by carmakers, Johnson Matthey said last month.
Platinum is down 1.8% at $1 432 an ounce since the strike began. Exchange-traded products hold a lot of metal above ground and jewellers act as a buffer for supply, MacLeod said.
“There’s a lot of metal around,” he said. “That’s probably why prices haven’t moved.” Johnson Matthey sees this year’s earnings broadly in line with those achieved last year.– Bloomberg