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Short-term uncertainty but long-term outlook for PGM prices seen brightening, say CEOs

Short-term uncertainty but long-term outlook for PGM prices seen brightening, say CEOs
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Ed Stoddard
By Ed Stoddard
3 Apr 2025
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While short-term turbulence is seen at a time when platinum group metals prices are generally depressed, the fundamentals — in the view of the industry — remain in place for a long-term rally.

Platinum group metals (PGMs) face headwinds galore with US President Donald Trump’s “Liberation Day” tariffs throwing a massive new spanner of uncertainty into the works.

But CEOs at the PGMs Industry Day conference in Johannesburg on Thursday, 3 April 2025, organised by Resources For Africa, remain cautiously optimistic over the longer term. And even Trump’s tariffs may have a silver lining for the industry.

“It’s going to be volatile in the short term, but if you have deficits in the sector it has to support prices,” Amplats CEO Craig Miller said during a panel discussion.

While short-term turbulence is seen at a time when PGM prices are generally depressed, the fundamentals — in the view of the industry — remain in place for a long-term rally, which will have huge implications for South Africa’s economy given its status as the biggest producer by far of the precious metals.

Fragile global economic recovery


PGM prices have been waylaid in recent years on a range of fronts, notably the fragile global economic recovery and concerns about the rise of battery electric vehicles that do not require a speck of the metals in their make-up. 

The primary use for PGMs remains in emissions-capping catalytic converters for internal combustion engines. 

Last year, the industry was hopeful as global interest rates started to fall and demand for battery electric vehicles stalled. But the trade wars that have been ignited by Trump have cast a cloud over that tentative optimism. 

“With the tariffs we see now, demand will be dampened. So prices will likely sit around where they are now for the next six to 12 months,” Richard Stewart, Sibanye-Stillwater’s CEO designate, told Daily Maverick on the sidelines of the conference. 

But Stewart also noted that there could be a silver lining in a surge of tariffs for PGMs. 

“What tariffs are telling us is the world is becoming more transactional. PGMs are critical metals and there is an opportunity to treat them as such... in the longer term they open doors on critical metals and on regional supply chains,” he told the conference. 

Pointedly, PGMs are excluded from Trump’s tariffs. 

One green shoot of note has been a rally in the rhodium price, which has risen 27% in the year-to-date to $5,700 an ounce. It remains far from its peak of almost $30,000 an ounce scaled four years ago, but a rally has to start somewhere.

“Rhodium is such a tight market. It is such a small market that it doesn’t take a hell of a lot to swing it one way or the other, but what it does tell you is that the market is tight,” Stewart said.

Amplats’ Miller noted that this was a signal of a market in a deficit — which usually underpins a commodity’s price.

“Rhodium is in a deficit, platinum is in a deficit and that has to translate into a higher price. It’s just economics,” Miller told Daily Maverick.

Graphic created using Napkin AI


Demand for hybrid vehicles


In the longer run, the PGM industry is pinning its hopes, among other things, on demand for hybrid vehicles, which overtook the sale of petrol vehicles in the EU for the first time last year.

Hybrid vehicles require the same amount of PGMs as those powered by internal combustion engines, and in some cases more.

Hydrogen fuel cell cars are also seen gaining traction in the future, and they require platinum and iridium — another PGM. But they don’t use rhodium or palladium so will not stoke any PGM demand on that front.

“The concern for palladium and rhodium is that they do not have the fuel cell applications for hydrogen,” Impala Platinum CEO Nico Muller told the conference. 

For South Africa, which accounts for about 70% of global PGM production, the stakes are high. 

According to the Minerals Council, in 2024 the PGM sector employed more than 174,000 employees directly who earned R76.7-billion last year. Total sales amounted to R167.4-billion and 97% of that value was exported, making the sector a key source of hard currency for the economy.

So a turnaround in its fortunes is crucial for the wider South African economy.

 

What this means for you



  • Short-term pain, long-term hope: PGM prices are facing uncertainty because of global trade tensions, but industry leaders believe prices will rise in the long run. This means mining companies might struggle for now, potentially affecting jobs, wages, and investments in mining towns.

  • Jobs at stake: The sector employs more than 174,000 people. If prices stay low, mining companies might cut costs, which could lead to job losses or lower wages. On the flip side, if prices rebound, the sector could remain a crucial pillar of the economy.

  • The car connection: PGMs are mainly used in vehicle catalytic converters. While electric cars (which don’t use PGMs) have been a concern for the industry, the rising demand for hybrid cars (which still need PGMs) offers some relief. This could help stabilise demand in the long term.

  • Exports and the economy: PGMs generate billions in foreign currency for South Africa. If the industry thrives, it strengthens the rand, boosts tax revenue, and supports public services. If it struggles, the knock-on effect could mean economic instability.

  • Silver lining: While Trump’s tariffs shake global markets, PGMs have been left out. This could create new opportunities in global trade, benefiting South African miners in the long run. DM


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