Platinum Group Metals (PGMs) - Analyzing Recent Price Trends - Afreximbank Research

This halt to investment comes on the back of the company realising an average PGM basket price of $1,893 per ounce in the year ended Sept.30, a 26% shortfall from the average of $2,564 realised per ounce in the same period in 2022. [...] Also reflective of the weakness in the macroeconomic environment and lower PGM prices is the financial results of Anglo American Platinum for the year end 2023. [...] 8 03 Implicationsof the Trend 9 Implications of the Trend Lower investment and long-term constrain on future supply 01 The scale and duration of the decline in PGM prices has the potential to discourage investors from investing in mineral exploration. [...] In light of 2024 being an election year in South Africa and considering that the mining sector is an important lifeline of the country's economy, particularly as the leading source of PGMs in the world, the likelihood of a substantial decrease in production and supply seems low given its critical impact on employment, output and export earnings. [...] In the near term, however, we expect the supply of PGMs to retreat significantly as firms increasingly cut back on investments in the mining and exploration of PGMs because the lower price is a strong disincentive to production and supply.