Hint of cautious optimism in the air for Platinum Group Metals

UNITED STATES May 26 2016 12:37 PM

NEW YORK (Scrap Register): Market participants appear to feel that prices of platinum group metals have hit their low, yet conviction still remains low, said Joni Teves, strategist with UBS, in an assessment of London Platinum Week events. 

Gold “stole the scene” during the PGM event, she adds, with discussions among attendees often starting with PGMs but then veering to gold, suggesting that the yellow metal may influence PGM prices this year. 

As for PGMs themselves, Teves said, “Sentiment has improved from last year, although admittedly this was coming from quite a low base. Many of those we spoke with felt that the market has bottomed, and if anything, there seemed to be a hint of cautious optimism in the air. However, conviction levels seemed quite low, with markets not really offering much to get excited about.” 

There appeared to be “frustration” with the lack of producer discipline and an acute focus on above-ground stocks. While it is virtually impossible to pin down the exact amount of above-ground inventories, the market should respond intuitively once consumers star to become concerned about sourcing metal, she added.

“It will be crucial to watch for signals from sponge premia, forwards and other parts of the market that would indicate that consumers are either starting to encounter difficulties in sourcing metal or are starting to get concerned about the potential to source metal going forward,” she concluded.