Eurasia Mining

BARCLAYS ON PGMS Low metal inventories could see PGM prices squeezed near-term: Above-ground PGM stocks are at very low levels, particularly for palladium and rhodium which are at 14-year lows… If you take the cumulative supply and demand balances since 2010, the theoretical stocks for palladium are at -6moz and rhodium at -150koz. Back in 2020, the World Platinum Investment Council estimated above-ground platinum stocks excluding ETF investments (which are tightly held) at 2.4moz. We forecast the platinum market to remain in deficit for the third consecutive year in 2025. Adding the cumulative supply and demand balances since 2021 leaves the estimated above-ground platinum stock at 2.2moz by year-end, equivalent to ~27% of demand. A liquidity shortage in the platinum ingot market has also provided support to prices so far this year, due to a large influx of platinum into NYMEX warehouses in the US due to fears that the US government could impose tariffs on precious metals. This has drained liquidity from the European ingot market and caused a spike in short-term lease rates to over 10%. Recent spikes in the rhodium price suggest that some of the above-ground metal inventory is tightly held, particularly when there are expectations of improving demand. "Rhodium is always the canary in the coal mine". This suggests that we could see price squeezes in some of the other PGM metals as demand picks up. Improving Chinese jewellery/investment demand could exacerbate tightness: Consumer demand for platinum jewellery has seen a slight tick up in 2024 after multi-year declines over 2013-2024 (-78% from peak of 2.1moz in 2013). However, exceptionally high gold prices are motivating retailers to trim their gold jewellery stocks and increase platinum inventories. This is supported by a number of positive data points: 1) China platinum imports in April rebounded strongly, turnover data suggests May could be a record month, according to Amplats management; 2) Platinum trading volumes on the Shanghai Gold Exchange reflected the strongest start to the year since 2021; and 3) World Platinum Investment Council (WPIC) estimates Chinese platinum jewellery sales +26% QoQ in Q1 2025 vs gold jewellery sales falling 32% QoQ. Platinum could also benefit from some spillover of 'safe haven' investment demand from the gold market.