South African PGM production stayed virtually flat in Q1, rising by just 1% (+5 koz) year-on-year to 879 000 ounces.
Anglo American Platinum’s production of refined platinum was effectively halted on March 6th due to the unplanned shutdown of the company’s converter plant or ACP.
This loss was partly offset by increases from Impala Platinum, where a drawdown of in-process inventory buoyed refined output.
In an effort to curb the spread of COVID-19, the country entered lockdown on March 26th resulting in 6 days of lost mine production, although some limited mining and smelting continued.
Eskom implemented limited stage 2 load shedding, impacting some mining operations during the quarter, however, refined output was unaffected. This contrasts with Q1’19 when South Africa’s ongoing power generating crisis resulted in significant lost production.
Zimbabwe posted a modest supply increase, up 1% (+6 koz) to 118 koz, due to higher output from Unki and Zimplats. The country entered lockdown on March 30th, however all mining operations have received approval to continue working.
Russia represented the biggest change year-on-year, with production falling 26% (-54 koz) to 150 koz. This was a result of the pre-commissioning of the new refining plant at Nornickel, causing a build-up of in-process inventory.
The year-on-year impact was compounded as output from Q1’19 benefited from a release of in-process inventory.
North American mine supply grew 9% (+8 koz) year-on-year primarily due to increased output from Vale.
During Q1’20 the recovery of platinum from spent autocatalysts reduced by 2% (-7 koz) year-on-year to 406 koz. However, the quarterly total remains high by historical standards due to some contrasting drivers.
The important European and North American recycling market volumes were relatively strong through to early March for two reasons.
First, autocatalysts being recycled now contain a higher portion of platinum-based catalysts reflecting the increase in their use in after-treatment systems in the early to mid-2000s, especially in Europe where the light duty diesel vehicle share grew from around 30% to 50%.
Second, record palladium and near-record rhodium prices saw increased autocatalyst flows from scrapyards and aggregators, a theme which had characterised much of 2019.
However, this was partly offset as the lockdown led to a steep fall in supplies of end-of-life vehicles in some jurisdictions towards the end of the quarter.
In addition, capacity constraints in some parts of the smelting and refining industry, also a re-occurring theme from last year, weighed on the volume of platinum that was recovered.
Jewellery recycling declined by 42%, as consumer movement was severely constrained during the first part of the quarter, especially in Asia. In addition, the low and declining price during the quarter acted as a disincentive.