Stillwater talking its book?
commodityonline.com
Platinum, palladium price gap to narrow down
TORONTO (Commodity Online): If a mining major is to be believed, difference between the prices for platinum and palladium will decrease in the coming days.
Both metals are used in autocatalysts. However, platinum is currently trading at above $1 500/oz, while palladium is valued at $421/oz.
According to Stillwater Mining CEO Frank McAllister, there is no scope for parity between the two metals, but palladium could potentially increase to half the price of platinum.
That is going to become the riddle that will have to be solved by market analysts and spectators alike, he said.
“I don't expect there to be parity between the two prices, but I do expect there to be a greater equilibrium than the one we have seen for the past 20 years,” a report in Miningweekly said.
The metals are becoming increasingly interchangeable in catalytic converter applications, as automakers have focused their research efforts on cheaper palladium.
In fact, for most of the catalytic converter market, there is little compelling product difference between platinum and palladium except price.
However, South Africa’s dominant position in the supply of platinum-group metals (PGMs) will ensure that platinum prices remain higher.
This is because the market price for platinum, which accounts for most South African PGM production, will need to be high enough to incentivise miners in the country to bring on new capacity to meet global requirements for the metals.
Unlike South African producers, US-based Stillwater produces more palladium than platinum, at a ratio of about 3.3 to 1, and so stands to benefit from increased use of palladium in autocatalysts and from firmer prices for the metal.
Stillwater operates two mines - Stillwater and East Boulder - in the Beartooth Mountains of south-central Montana, in the US.
(SOURCE: miningweekly.com) |
