2007 presentation slides - johnson matthey · supply 6,640 6,785 +2.2 demand 6,695 6,775 +1.2...

Platinum Platinum 20072007

14th May 200714th May 2007

PlatinumPlatinum

www.platinum.matthey.com

Platinum: Key featuresPlatinum: Key features

• Platinum market moves into surplus after 7 years of deficit

• Autocatalyst growth through diesel

• Jewellery recycling increases

• South African supply rises

• Supply disruptions in early 2007

• ETF launches


Platinum Supply and DemandPlatinum Supply and Demand

1010(55)Movements in stocks

+2.26,7856,7856,640Supply

+1.26,7756,7756,695Demand

%%2006200620052005’000 oz


Platinum Demand Rises 80,000 ozPlatinum Demand Rises 80,000 oz

• Total demand edges 1.2% up to 6.78 million oz

• Autocatalyst demand climbs, driven by diesel growth

• Jewellery demand affected by high metal price

• Healthy growth in industrial sectors

0

1

2

3

4

5

6

7

8

2005 2006

Auto Jlry Ind.

million oz

6.695 6.775


Platinum Demand: Platinum Demand: AutocatalystAutocatalyst• Autocatalyst demand rises 400,000 oz to 4.20 million oz

• Japanese platinum use falls marginally

• Global heavy duty diesel demand now exceeds 200,000 oz

• European and North American platinum uptake rises due to light duty diesel vehicles

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005 2006China Japan N. Am.Europe RoW

million oz

3.795 4.195


Platinum Demand: Platinum Demand: AutocatalystAutocatalyst

0.0

1.0

2.0

3.0

4.0

5.0

2003 2004 2005 2006

Gasoline Diesel

million oz


Platinum Demand: Jewellery Platinum Demand: Jewellery

0.0

0.5

1.0

1.5

2.0


million oz1.965 1.605 • High prices negatively affect

global jewellery demand

• Total global demand falls 360,000 oz to 1.61 million oz

• Demand for new metal falls in every region

• Retail sales resilient in key markets


Platinum: Chinese Jewellery ManufacturePlatinum: Chinese Jewellery Manufacture

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2005 2006

Demand Recycling

million oz

• Net demand for new metal falls 115,000 oz to 760,000 oz

• Retail sales little changed in weight, up in value

• Recycling of unsold stock and pieces returned by consumers doubles in size


Platinum SupplyPlatinum Supply

0

1

2

3

4

5

6

7

8

2005 2006

RSA Russia Other

million oz

6.640 6.785• 2006 South African

expansions raise sales by 175,000 oz

• Mixed performance from South African mining houses

• Production in Russia and elsewhere fairly flat

• Pgm basket price remains at historically high levels


Platinum OutlookPlatinum Outlook

• Further growth in demand for diesel

autocatalysts

• Improved first four months of SGE sales

• First half supply disruptions resolved

• Second half supplies to recover strongly

• Market likely to move into surplus


Forecast Platinum Price for the Forecast Platinum Price for the Next 6 MonthsNext 6 Months

900

1,000

1,100

1,200

1,300

1,400

1,500

J A J O J A J O

$ per oz

2006 2007

$1,200 – $1,400

PalladiumPalladium


Palladium: Key featuresPalladium: Key features

• Palladium supply exceeded demand by more than 1 million oz in 2006

• Autocatalyst substitution for platinum

• Jewellery demand falls

• Global supplies lower than in 2005

• Fund and investor interest


Palladium Supply and DemandPalladium Supply and Demand

1,4251,4251,050Movements in stocks

-4.18,0608,0608,405Supply

-9.86,6356,6357,355Demand

%%2006200620052005’000 oz


Palladium Demand ShrinksPalladium Demand Shrinks

• Total demand contracts by 10% to 6.64 million oz

• Increased recycling balances growth in autocatalystpurchases

• Sharp fall in palladium jewellery demand from 1.43 million oz to 995,000 oz

• Electronics demand rises to over 1 million oz.

6.6357.355

0

1

2

3

4

5

6

7

8

2005 2006

Auto Jlry Ind.

million oz


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0


million oz

Palladium Demand: Autocatalyst Palladium Demand: Autocatalyst

3.865 4.015

• Strong production growth in Asia: Japan and China contribute 190,000 oz extra demand

• Palladium continues to replace platinum in gasoline catalysts everywhere


PgmPgm choice in choice in AutocatalystsAutocatalysts

0.0

25.0

50.0

75.0

100.0

2005 2006

Palladium Platinum

percentage of pgm used (Pt/Pd)

0.0

25.0

50.0

75.0

100.0

2005 2006

Palladium Platinum

percentage of pgm used (Pt/Pd)

Gasoline Diesel


Palladium Demand: Jewellery Palladium Demand: Jewellery

• Chinese demand falls by 440,000 oz to 760,000 oz

• Pipeline filling of 2004-2005 completed

• Large amounts of Pd950 stock returned for recycling

• Retail sales patchy0

250

500

750

1,000

1,250

1,500

2003 2004 2005 2006China RoW

'000 oz


Palladium SupplyPalladium Supply

8.405 8.060

0

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2

3

4

5

6

7

8

9

2005 2006S.Africa RussiaN.Am. Other

million oz

• Supply drops 345,000 oz to 8.06 million oz

• Russian sales fall by 720,000 oz

• South African expansions partly counterbalance this, with sales rising 300,000 oz


0

1

2

3

4

5

2005 2006Norilsk State salesStillwater

million oz

Palladium Supply: RussiaPalladium Supply: Russia

4.620 3.900 • Norilsk production 25,000 oz up on 2005

• Final sales of Stillwater/Norilskmetal

• 2006 Russian state shipments too late in the year to be supplied to consumers


Palladium OutlookPalladium Outlook

• Autocatalyst palladium demand to continue

expanding in 2007

• Some growth in the palladium jewellery market

possible

• Russian Dec. 2006 shipments likely to boost 2007

supplies

• Another year of substantial surplus expected


Forecast Palladium Price for the Forecast Palladium Price for the Next 6 MonthsNext 6 Months

250

300

350

400

450

J A J O J A J O

$ per oz

2006 2007

$320 – $420

Other Other pgmpgm


RhodiumRhodium

• Market in deficit in 2006

• Supply rose to 824,000 oz with South African growth and additional Russian stock sales

• Demand rises to 837,000 oz with autocat the main driver

2,5003,0003,5004,0004,5005,0005,5006,0006,5007,000

J A J O J A

$ per oz

2006 2007


RutheniumRuthenium

• Demand rose 45% to 1.29 million oz in 2006

• Increase in PMR hard disk market share

• Build-up of pipeline inventory

• Recycling yet to catch up0

100200300400500600700800900

J A J O J A

$ per oz

2006 2007

Platinum Platinum 20072007

14th May 200714th May 2007

2007 presentation slides - johnson matthey · supply 6,640 6,785 +2.2 demand 6,695 6,775 +1.2...

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