Value Microcaps Junior Miners

[Bobwins]

Big Platinum News +$38.40 to $904.10

Platinum has been the laggard in precious metals for several years. The VW Diesel debacle has slowed diesel sales worldwide and that has lessened demand for platinum in catalytic converters. Conversely Palladium and Rhodium are used in gasoline catalytic converters and are in actual deficit supply situations, leading to tremendous increases in prices.

Last week Anglo American Platinum announced a temporary shutdown of their Anglo Converter Plant. They had an explosion that shutdown their primary converter A 2/10/20. They had a backup unit and were in the process of ramping it up when they found water in the furnace unit, which could cause explosions. So they had to shut down the B unit. They expect Unit A to be repaired by second qtr 2021 and Unit B to be back in operation in 80 days.

As a result of the total closure of this part of the process, they expect total platinum production to drop by ~900K ounces in 2020.

THIS IS HUGE! Total world platinum production in 2018 was ~8 million ounces. Over 10% of supply has just vanished until 2021. I expect platinum prices to finally participate in the PGM rally. In addition, this will also give manufacturers more time to transition from palladium to platinum in designing catalytic converters. Palladium is still more than 2 times more expensive than platinum at $2400 vs 904 per ounce.

The shortage in platinum will not be huge, a few hundred thousand ounces for 2020 but the example of a major producer going offline may cause users to try to stockpile platinum, which could lead to a bigger short term price jump than fundamentals would justify.

Who's going to benefit? Sibanye Stillwater, SBSW, is a good candidate. #1 platinum producer in the world. #2 palladium producer #1 rhodium producer. They win any which way it goes in the PGM world.

Here are the links:

https://www.angloamericanplatinum.com/media/press-releases/2020/06-03-2020

https://www.statista.com/statistics/418212/global-platinum-supply/

https://www.prnewswire.com/news-releases/wpic-platinum-quarterly-2019-global-platinum-market-balanced-with-surplus-forecast-in-2020-300961909.html