Engineering & Mining Journal

DEC 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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112 E&MJ • DECEMBER 2018 www.e-mj.com MARKETS Recent trends among metals markets continue. Among the precious metals, palladium prices posted a new record, while platinum prices declined and the price of gold held steady. Prices for most base metals moderated during the last month, except zinc, which posted a 7.4% price increase to settle at $2,709 per metric ton (mt). Iron ore prices dropped 10% to $66.76/mt. On December 5, palladium closed at $1,262 per ounce (oz) in New York, according to Johnson Matthey. The gold price that day settled at $1,239.50/oz. For four months now, a demand-fueled rally has pushed palladium prices high- er. While this is great news for palladium miners, it's not the fi rst time palladium has traded above gold. It's just been a while since it happened. For much of the late 1990s, palladium traded above gold before reaching an infl ection point about 15 years ago. Autocatalysts manufacturers are scrambling as more consumers switch from diesel- to gas-powered cars. While most metals have moved side- ways this year amid global trade discus- sion and a strengthening U.S. dollar, palladium reached record levels four times during November. Investor hold- ings in palladium-backed exchange trad- ed funds (ETFs) have reached their lowest levels since February 2009. Palladium's defi cit is expected to widen to about 1.4 million oz in 2019, adding to a 1.2-mil- lion-oz shortfall this year. The ability of miners to increase pro- duction is limited. Metals Focus in its Precious Metals Weekly (November 20, 2018) reminded readers that palladium is one of several platinum group metals that is mined from polymetallic ore bod- ies. For the largest palladium producer, Nornickel, palladium represents 36% of total metal sales revenue. The company recently reiterated an essentially fl at pro- duction profi le out to 2020. Over the next fi ve years, Metals Focus is forecasting only a limited supply re- sponse from South Africa, with additional ounces from the fi ve growth projects by cost-driven closures at Implats and Lon- min. Platinum forms a larger share of these operations' revenue and thus the fall in platinum price has mitigated the benefi t of rising palladium revenues. The palladium-rich ore bodies of Sibanye's U.S. operations and North American Palladium's Lac des Iles have meant that both operations benefi t and each is pursuing growth. However, the 250,000-oz additional contribution to North American production in 2021 will be partially offset by losses from Vale, which produces palladium as a byproduct of nickel mining. Metal Focus said glob- al palladium production could decline by 2% to 6.7 million oz next year. Palladium Settles Above Gold Gold and silver prices provided by KITCO Bullion dealers (www.kitco.com). Platinum group metals prices provided by Johnson Matthey (www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (www.lme.co.uk). Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by www.xe.com. (December 7, 2018) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,247.80 Aluminum $1,962.00 Molybdenum $26,000 Euro (€) 1.139 Silver $14.58 Copper $6,173.00 Cobalt $55,250 U.K. (£) 1.275 Platinum $792.00 Lead $1,965.00 Canada ($) 0.752 Palladium $1,218.00 Nickel $10,815.00 Iron Ore ($/dmt) Australia ($) 0.721 Rhodium $2,600.00 Tin $18,930.00 Fe CFR China $66.76 South Africa (Rand) 0.071 Ruthenium $270.00 Zinc $2,709.00 China (¥) 0.145

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