PLATINUM OVERVIEW OF PGM MARKETS 24 NOVEMBER 2016 David Jollie, Market Analysis Manager Miss South Africa Platinum Crown 2013 - 2015
CAUTIONARY STATEMENT This presentation has been prepared by Anglo American Platinum Such forward ‐ looking statements are based on numerous any forward ‐ looking statement contained herein to reflect any Limited (“Anglo American Platinum”) and comprises the written assumptions regarding Anglo American’s present and future change in Anglo American’s expectations with regard thereto or materials/slides for a presentation concerning Anglo American business strategies and the environment in which Anglo any change in events, conditions or circumstances on which any Platinum. By attending this presentation and/or reviewing the slides American Platinum will operate in the future. Important factors such statement is based. you agree to be bound by the following conditions. that could cause Anglo American’s actual results, performance or Nothing in this presentation should be interpreted to mean that This presentation is for information purposes only and does not achievements to differ materially from those in the forward ‐ future earnings per share of Anglo American Platinum will constitute an offer to sell or the solicitation of an offer to buy shares looking statements include, among others, levels of actual necessarily match or exceed its historical published earnings per in Anglo American Platinum. Further, it does not constitute a production during any period, levels of global demand and share. recommendation by any of the Anglo American group of companies commodity market prices, mineral resource exploration and Certain statistical and other information about Anglo American (“Anglo American”) or any other party to sell or buy shares in Anglo development capabilities, recovery rates and other operational Platinum included in this presentation is sourced from publicly American Platinum or any other securities. All written or oral capabilities, the availability of mining and processing equipment, available third party sources. As such it presents the views of forward ‐ looking statements attributable to Anglo American Platinum the ability to produce and transport products profitably, the those third parties, but may not necessarily correspond to the or persons acting on their behalf are qualified in their entirety by impact of foreign currency exchange rates on market prices and views held by Anglo American. these cautionary statements. operating costs, the availability of sufficient credit, the effects of The views expressed here contain information derived from publicly inflation, political uncertainty and economic conditions in No Investment Advice available or third party sources that have not been independently relevant areas of the world, the actions of competitors, activities This presentation has been prepared without reference to your verified. by governmental authorities such as changes in taxation or particular investment objectives, financial situation, taxation Forward ‐ Looking Statements safety, health, environmental or other types of regulation in the position and particular needs. It is important that you view this This presentation includes forward ‐ looking statements. All countries where Anglo American Platinum operates, conflicts presentation in its entirety. If you are in any doubt in relation to statements other than statements of historical facts included in this over land and resource ownership rights and such other risk these matters, you should consult your stockbroker, bank presentation, including, without limitation, those regarding Anglo factors identified in Anglo American’s most recent Annual manager, solicitor, accountant, taxation adviser or other American’s financial position, business and acquisition strategy, Report. Forward ‐ looking statements should, therefore, be independent financial adviser (where applicable, as authorised plans and objectives of management for future operations (including construed in light of such risk factors and undue reliance should under the Financial Services and Markets Act 2000 in the UK, or development plans and objectives relating to Anglo American’s not be placed on forward ‐ looking statements. These forward ‐ in South Africa, under the Financial Advisory and Intermediary products, production forecasts and reserve and resource positions), looking statements speak only as of the date of this Services Act 37 of 2002.). are forward ‐ looking statements. Such forward ‐ looking statements presentation. Anglo American Platinum expressly disclaims any involve known and unknown risks, uncertainties and other factors obligation or undertaking (except as required by applicable law, which may cause the actual results, performance or achievements of the City Code on Takeovers and Mergers (the “Takeover Code”), Anglo American, or industry results, to be materially different from the UK Listing Rules, the Disclosure and Transparency Rules of any future results, performance or achievements expressed or the Financial Services Authority, the Listings Requirements of the implied by such forward ‐ looking statements. securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to 2
OVERVIEW 1 Primary supply 2 Secondary supply 3 Current demand 4 The automotive sector – opportunity or challenge 5 Platinum jewellery 6 Demand stimulation 7 A few thoughts on pricing 8 Questions 3
1 Primary supply WHERE DO THE PLATINUM GROUP METALS COME FROM? Auto catalyst recycling Mogalakwena mine 4 Jewellery recycling Norilsk
1 Primary supply GLOBAL PLATINUM GROUP METAL SUPPLY A declining supply picture emerges at the end of the decade Global platinum supply 2015-2025 (000 oz) CAGR 9,000 2015 – 2025: 0.1% 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Recycling Other mining South Africa Source: SFA (Oxford) 5
1 Primary supply THE PRIMARY CASH COST CURVE 2016 cash costs Spot price, 16 Nov Source: SNL 6
1 Primary supply WHAT WILL HAPPEN TO PRIMARY SUPPLY? South African production and capex Refined platinum production versus capital expenditure (2015 money terms) Source: Venmyn Deloitte 7
1 Primary supply WHAT COULD SUPPLY LOOK LIKE? Bring on new supply is challenging Source: 8 Johnson Matthey
2 2 Secondary supply y MODEST GROWTH IN RECYCLING OF PLATINUM FORECAST 9 Source: Anglo American Platinum
3 Current demand WHY DO PEOPLE BUY THE PLATINUM GROUP METALS? 10 Images: Platinum guild international; Johnson Matthey
3 Current demand GLOBAL PLATINUM DEMAND BY SECTOR Global platinum demand 2015-2025 (000 oz) CAGR 2015 – 2025: 1.0% 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: SFA (Oxford) Other Jewellery Automotive 11
3 Current demand GLOBAL PALLADIUM DEMAND BY SECTOR Global palladium demand 2015-2025 (000 oz) CAGR 2015 – 2025: 1.1% 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: SFA (Oxford) Other Automotive 12
4 The automotive sector – opportunity or challenge 4 The automotive sector – opportunity or challenge THE AUTOMOTIVE SECTOR Annual light duty vehicle production CAGR 2015 – 2025: 2.9% 120,000,000 110,000,000 100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Electric Hybrids Gasoline Diesel 13 Source: LMC Automotive, Anglo American Platinum
4 The automotive sector – opportunity or challenge 4 The automotive sector – opportunity or challenge WHAT IS THE FUTURE FOR THE DIESEL ENGINE? Source: LMC Automotive 14
4 The automotive sector – opportunity or challenge 4 The automotive sector – opportunity or challenge THRIFTING AND SUBSTITUTION Limited risk, and some opportunity as emission standards tighten % of maximum emissions Euro 5/Euro 6 HC Hydrocarbon CO: Carbon monoxide 15 NOX: Oxides of nitrogen Source: Platinum Metals Review/Johnson Matthey
4 The automotive sector – opportunity or challenge 4 The automotive sector – opportunity or challenge DEVELOPMENTS IN THE AUTOMOTIVE INDUSTRY A degree of scepticism should be applied regarding future technologies… 16
4 The automotive sector – opportunity or challenge 4 The automotive sector – opportunity or challenge THE FUTURE FOR HYBRIDS Hybrids and Oil Prices in the USA 4.0 140 3.5 120 3.0 100 2.5 80 2.0 60 Forecast EV Penetration Rates 1.5 40 12% 1.0 FHEV MHEV PHEV BEV EREV FCEV Hybrid US Mkt Share (%, LHS) 20 0.5 WTI ($/barrel, RHS) 10% 0.0 0 Jul 08 Dec 08 May 09 Oct 09 Mar 10 Aug 10 Jan 11 Jun 11 Nov 11 Apr 12 Sep 12 Feb 13 Jul 13 Dec 13 May 14 Oct 14 Mar 15 Aug 15 Jan 16 8% 6% 4% 2% 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 FHEV: Full Hybrid Electric Vehicle BEV: Battery Electric Vehicle MHEV: Mild Hybrid Electric Vehicle EREV: Electric Vehicle with Extended Range PHEV: Plug-in Hybrid Electric Vehicle FCEV: Fuel Cell Electric Vehicle 17 Source: HybridCars.com, LMC, Bloomberg
Recommend
More recommend
