Tharisa Updates on the PGM and chromium market
Although PGM prices are trading in the lower half of their 12-month range, driven by the economic slowdown, prices have not retreated as much as anticipated. Demand-supply fundamentals, particularly for palladium and rhodium, which remain in deficit, with platinum projected to be in a deficit within the next 18 months, according to consensus market analysis.
While supply from Russia is difficult to predict, primary supply from South Africa is slowing, driven by lack of development, rising costs and electricity curtailments, affecting deep level mines in particular. At the same time, the increasing importance of PGMs for the future of the hydrogen economy underpins our conviction that the fundamentals for these precious metals remains strong
Chrome prices were volatile during the quarter where they retreated in line with expectation,mostly due to stainless steel and ferrochrome production curtailments in China. Consequently, port inventory rose slightly, albeit off a very low base.
Inflationary cost pressures, supply chain constraints and the Covid policy in China remained key macro issues to the market. Towards the end of the quarter, increased demand stimulated a higher price environment as production of steel and alloy normalised. Policy announcements from the Party Congress on 16 October 2022 in China relating to the relaxation of Covid policies, and more stimulus packages being announced, would bode well for demand of Tharisa’s chrome concentrates. Tharisa believes that supply disruptions will mitigate a price retreat, in the face of pricing risks and slowing economies heading towards a recessionary environment.
