Platinum and Palladium Fall as Fed Rate Hike Strengthens Dollar

[SMM Flash] Valterra Platinum has highlighted the scale of its Mogalakwena PGM operation in South Africa's Limpopo province, with executive head of mining operations Willie Theron pointing to an inclusive resource of about 285 million oz on a 4E basis. Valterra is targeting annual Mogalakwena production of about 900,000 oz to 1 million oz on a 6E basis, with management describing the scale of the mineral endowment as supporting resource-life potential exceeding 300 years. The figure highlights Mogalakwena's strategic importance to Valterra's long-term PGM supply base and provides substantial optionality for future mine sequencing, processing and capital deployment. However, the 300-year-plus figure should not be interpreted as a 300-year mine plan or Mineral Reserve life: it relates to the scale of the inclusive Mineral Resource and the resource and production figures are also reported on different 4E and 6E bases. Actual economically mineable reserves and future production will depend on technical, economic and market conditions.

Platinum and palladium prices opened lower with a gap this week, consolidated at lows, and moved sideways after the rate hike landed, with both metals closing lower for the week. In the spot market, after futures opened sharply lower early in the week, spot platinum and palladium discounts narrowed notably. Orders from most downstream buyers recovered, as they actively inquired and purchased near short-term price lows following the futures market. Cargoes at deep discounts were cleared, and suppliers held prices firm on shipments. In the near term, platinum and palladium are likely to consolidate on a subdued note. Going forward, close attention should be paid to US Fed officials' remarks, US September inflation and employment data, and the policy path from the meeting.