The World Has Lost This Precious Metals Source

Interesting note from Impala Platinum’s first-quarter numbers this week.

Implats reported a 17% drop in platinum production in the three months to September 30, year-on-year.

The interesting thing is this wasn’t due to mining problems. The production issues came from a different arena: recycling.

The company said that its platinum recycling output plunged 31% during the quarter, to 181,000 ounces. A loss of over 80,000 ounces from last year.

An Implats spokesman said that the decline was due to one large recycling client. Who had stopped making deliveries of scrap platinum to Implats because of “depressed prices” for the metal.

This is a significant revelation. If platinum prices really are too low to make recycling worthwhile, the result would be a huge loss of supply in this market. Recycled platinum is estimated to have provided over 4.8 million ounces in 2012.

That’s a big number, against mined platinum supply of only 5.75 million ounces for the same year.

These figures imply that Implats’ recycling woes alone could have a market impact. The company’s annualized production loss based on the Q1 numbers is on the order of 320,000 ounces. Equivalent to nearly 7% of global recycling supply.

The bigger question is: are current prices going to squeeze other recyclers as well? If so, we may see a larger supply loss. In a market that’s already struggling to keep up mined output.

Here’s to making the old new again,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

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