Warsh’s Speech at the Central Bank Annual Conference Leaned Hawkish, Platinum Drifted Lower, Spot Market Was Dominated by a Wait-and-See Stance [SMM Daily Review]

[SMM Flash] Platinum's market outlook has strengthened significantly from the prolonged downturn described in earlier assessments, with persistent supply constraints now providing a stronger foundation for prices. The World Platinum Investment Council (WPIC) forecasts a fourth consecutive platinum market deficit in 2026, widening its estimate to 297 koz. Above-ground stocks are expected to fall to less than three months of global demand by year-end, highlighting increasingly tight physical availability. Mine supply is forecast to remain broadly flat while higher prices encourage recycling. Demand remains mixed. Automotive consumption continues to face structural pressure from battery-electric vehicle adoption, but hybrid vehicles, tighter emissions regulations and platinum substitution in autocatalysts are providing offsets. WPIC forecasts 2026 industrial demand to increase 9% to 2.24 Moz, supported partly by glass capacity expansion. Platinum's emerging applications in hydrogen technologies, semiconductor manufacturing and AI data-centre infrastructure could provide additional long-term demand, although the scale and timing remain uncertain. The near-term market is increasingly influenced by investment flows and the wider precious-metals environment. WPIC estimates that ETF outflows and exchange-stock reductions have removed around 750 koz from visible holdings in 2026, creating the possibility of a modest full-year surplus despite underlying physical tightness.

[SMM Flash] Southern African PGM producers are recording sharply higher realised basket prices as stronger platinum, palladium, rhodium and minor PGM prices feed through to producer revenues. Valterra Platinum reported a Q2 2026 realised basket price of $2,710 per PGM ounce, up 80% year on year, while its realised platinum, palladium and rhodium prices reached $1,966/oz, $1,452/oz and $10,014/oz, respectively. Tharisa reported a Q3 FY2026 contained-metal basket price of $2,681/oz, despite a 12% quarter-on-quarter decline. The latest results from Sibanye-Stillwater reinforce the trend. The company reported on August 27 that its South African operations achieved a 67% year-on-year increase in the average rand 4E PGM basket price received during H1 2026, while PGM sales increased 12%. SA PGM adjusted EBITDA rose approximately 300%, demonstrating the strong earnings leverage created by higher realised metal values. Realised basket prices remain distinct from individual spot benchmarks because producer revenues reflect the specific 4E or 6E metal mix, payable production, sales timing, exchange rates and commercial arrangements. Current data indicate that the sharp rise in PGM prices is materially improving producer realisations, although quarter-on-quarter declines at Valterra and Tharisa show that basket values remain sensitive to individual metal price movements. With platinum currently around $1,850/oz and palladium around $1,300/oz, the market is entering a period in which metal mix and realised pricing will remain important determinants of Southern African PGM margins.