Platinum 2005 2005 Platinum 16th May 2005 16th May 2005 Platinum - - PowerPoint PPT Presentation

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Platinum 2005 2005 Platinum 16th May 2005 16th May 2005 Platinum - - PowerPoint PPT Presentation

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Platinum 2005 2005 Platinum 16th May 2005 16th May 2005 Platinum Demand + 1% Platinum Demand + 1% million oz 7 Demand edged up to a new high of 6.58 million oz 6 5 Strong growth from 4 autocatalyst sector and industrial

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SLIDE 1

Platinum Platinum 2005 2005

16th May 2005 16th May 2005

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SLIDE 2

www.platinum.matthey.com

Platinum Demand + 1% Platinum Demand + 1%

1 2 3 4 5 6 7 2003 2004 Demand

million oz

  • Demand edged up to a new

high of 6.58 million oz

  • Strong growth from

autocatalyst sector and industrial applications

  • Purchases for jewellery

manufacture dropped by 12 per cent

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SLIDE 3

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Platinum Supply + 5% Platinum Supply + 5%

1 2 3 4 5 6 7 2003 2004 Demand Supply

million oz

  • Supplies grew more

rapidly than demand, reaching 6.5 million oz

  • Market moved close to

balance

  • Price was supported by

fund investment, as well as by physical demand

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SLIDE 4

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Platinum Demand by Application Platinum Demand by Application

Autocatalyst: +7% Autocatalyst: +7%

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2003 2004

'000 oz

RoW N.America Japan Europe

3,270 3,510

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SLIDE 5

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250 500 750 1,000 1,250 1,500 1,750 1999 2000 2001 2002 2003 2004

'000 oz

20 25 30 35 40 45 50 55 % Pt in Gasoline Pt in Diesel LDD market share

European Demand for Platinum in European Demand for Platinum in Autocatalysts 1999 Autocatalysts 1999-

  • 2004

2004

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SLIDE 6

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Autocatalyst Demand for Platinum: Autocatalyst Demand for Platinum: Other Markets Other Markets

North America: down 10% to 800,000 oz

  • Substitution by palladium in gasoline autocatalysts

Japan: up 18% to 590,000 oz

  • Truck manufacturers introduce models with

catalysts & particulate filters as standard equipment

Rest of the World: up 7% to 460,000 oz

  • Higher light vehicle production and tightening

emissions limits in Asia

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SLIDE 7

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Platinum Demand by Application Platinum Demand by Application

Jewellery: Jewellery: -

  • 12%

12%

400 800 1,200 1,600 2,000 2,400 2,800 2003 2004

'000 oz

RoW Europe N.America Japan China

2,510 2,200

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SLIDE 8

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Fall in Chinese Jewellery Demand Fall in Chinese Jewellery Demand

down 19% to 1.01 million oz down 19% to 1.01 million oz

  • Increased competition from white gold and

palladium in provincial cities

  • Many manufacturers began production of

more profitable palladium jewellery

  • Inventories of platinum jewellery reduced

throughout the trade

  • Rising platinum price affected manufacturers’

profit margins and metal financing costs

  • But size of market previously underestimated,

diamond-set and bridal sectors developing

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Fall in Chinese Jewellery Demand Fall in Chinese Jewellery Demand

160 180 200 220 240 260 280 300 A J A O D F A J A O D F A

RMB per gram Retail Price, Shanghai Average Pt Price 2003 2004 2005

}

Manufact. Wholesaler Retailer 5% tax

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Jewellery Demand for Platinum: Jewellery Demand for Platinum: Other Markets Other Markets

North America: down 9% to 290,000 oz

  • High platinum price pressures sales at

lower end of US market

Japan: down 12% to 560,000 oz

  • Strong competition from white gold
  • Inventory recycling persists at high rates

Europe: up 8% to 205,000 oz

  • Further growth in UK market plus

strong sales of Swiss watches

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SLIDE 11

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Platinum Demand by Application Platinum Demand by Application

Industrial: +11% Industrial: +11%

200 400 600 800 1,000 1,200 1,400 1,600 2003 2004

'000 oz

Petroleum Glass Electrical Chemical Other

1,380 1,530

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Platinum Demand by Application Platinum Demand by Application

(12) 2,200 2,510 Jewellery % change % change 2004 2004 2003 2003 ’000 oz 7 3,510 3,270 Autocatalyst: gross 9 (700) (645) recovery 11 1,530 1,380 Industrial 40 15 Investment 1 6,580 6,530 TOTAL DEMAND

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Platinum Supply by Region Platinum Supply by Region

Total supply: +5% Total supply: +5%

1 2 3 4 5 6 7 2003 2004

million

  • z

Other

  • N. America

Russia South Africa

6.30 6.50

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Platinum Supply by Region Platinum Supply by Region

South Africa: up 9% to 5.03 million oz

  • Output exceeds expectations; higher

production from most major producers

  • Rand strength & other cost pressures cause

further revisions to expansion plans

Russia: down 19% to 850,000 oz

  • Sales drop back to reflect mine production

North America: up 31% to 385,000 oz

  • Strong recovery in output at Inco
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SLIDE 15

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Platinum Supply and Demand Platinum Supply and Demand

(80) (330) Movements in stocks +5 6,500 6,200 Supply +1 6,580 6,530 Demand % % 2004 2004 2003 2003 ’000 oz

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Platinum price price vs vs NYMEX net NYMEX net speculative position speculative position

January 2004 – April 2005

750 775 800 825 850 875 900 925 950 J F M A M J J A S O N D J F M A

$ per oz

  • 50

50 100 150 200 250 300 350

'000 oz

Total Net Spec. Weekly Average Price

2004 2005

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Palladium Demand + 22% Palladium Demand + 22%

1 2 3 4 5 6 7 8 2003 2004

Demand

million oz

  • Demand jumps to

Demand jumps to 6.6 million oz 6.6 million oz

  • Autocatalyst & electronics

Autocatalyst & electronics purchases improve purchases improve

  • Production of palladium

Production of palladium jewellery in China jewellery in China develops rapidly develops rapidly

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Palladium Supply + 18% Palladium Supply + 18%

1 2 3 4 5 6 7 8 2003 2004

Demand Supply

million oz

  • Supplies surge to

Supplies surge to 7.62 million oz 7.62 million oz

  • Large sales from Russian

Large sales from Russian stocks; increased mine stocks; increased mine production elsewhere production elsewhere

  • Market remained heavily in

Market remained heavily in surplus, price weakness surplus, price weakness persisted persisted

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Palladium Demand by Application Palladium Demand by Application

Autocatalyst: +10% Autocatalyst: +10%

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2003 2004

'000 oz

RoW N.America Japan Europe

3,450 3,810

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Autocatalyst Demand for Palladium Autocatalyst Demand for Palladium

Japan: up 23% to 675,000 oz

  • Palladium demand climbed as substitution of

platinum increased, emissions limits tightening

North America: up 20% to 1.445 million oz

  • US automakers increased purchases, having run down

inventories the previous year

Europe: down 5% to 1.16 million oz

  • Palladium demand fell for the fourth year as

gasoline vehicle sales continued to slide

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Palladium Demand by Application Palladium Demand by Application

Industrial, Jewellery & Other: +39% Industrial, Jewellery & Other: +39%

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2003 2004

'000 oz

Other Jewellery Dental Electronics

3,320 2,380

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Jewellery Demand for Palladium Jewellery Demand for Palladium

Purchases climb to 920,000 oz

  • Strong purchasing of metal in March/April as the

jewellery trade stocked up

  • Chinese manufacturers began mass producing

palladium jewellery in Q1 2004

  • Sales developed in second & third tier cities
  • Chinese jewellery demand jumped to 700,000 oz
  • Low metal funding costs an advantage; retailers

enjoyed good profit margins

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Palladium Demand by Application Palladium Demand by Application

% change % change 2004 2004 2003 2003 ’000 oz 3 850 825 Dental 10 3,810 3,450 Autocatalyst: gross 29 (530) (410) recovery 6 955 900 Electronics 47 595 405 Other 368 920 250 Jewellery 22 6,600 5,420 TOTAL DEMAND

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Palladium Supply by Region Palladium Supply by Region

Total supply: +18% Total supply: +18%

1 2 3 4 5 6 7 8 2003 2004

million

  • z

Other

  • N. America

Russia South Africa

6.45 7.62

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Palladium Supply by Region Palladium Supply by Region

Russia: up 29% to 3.8 million oz

  • Norilsk mine production stable
  • Total includes 375,000 oz of stock sold by Stillwater
  • Large volume of metal shipped from State inventories

South Africa: up 8% to 2.5 million oz

  • Production increased in line with expanding

platinum output

North America: up 13% to 1.055 million oz

  • Stronger production from North American Palladium
  • Recovery in output at Inco
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Palladium Supply and Demand Palladium Supply and Demand

1,020 1,030 Movements in stocks +18 7,620 6,450 Supply +22 6,600 5,420 Demand % % 2004 2004 2003 2003 ’000 oz

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Palladium price vs NYMEX net Palladium price vs NYMEX net speculative position speculative position

January 2004 – April 2005

100 150 200 250 300 350 J F M A M J J A S O N D J F M A

$ per oz

200 400 600 800 1,000

'000 oz

Total Net Spec. Average Price

2004 2005

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2005 Outlook 2005 Outlook -

  • Platinum

Platinum

  • Market to remain close to balance
  • Chinese jewellery market appears

resilient, helped by less volatile price

  • Diesels to drive further growth in

autocatalyst demand

  • Rate of growth in supplies depends on

South African expansions

  • Industrial consumption to remain firm
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Forecast Platinum Price For The Forecast Platinum Price For The Next 6 Months Next 6 Months

www.platinum.matthey.com

700 750 800 850 900 950 1,000 N D J F M A M J J A S O N

$ per oz

2004 2005

$830 – $930

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2005 Outlook 2005 Outlook -

  • Palladium

Palladium

  • Market surplus expected to persist
  • Direction of Chinese jewellery market unclear
  • Total autocatalyst demand unlikely to change
  • Mine output to expand, sales from stocks

to continue

  • Significant increase in autocatalyst recovery
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Forecast Palladium Price For The Forecast Palladium Price For The Next 6 Months Next 6 Months

www.platinum.matthey.com

100 150 200 250 300 N D J F M A M J J A S O N

$ per oz

2004 2005

$160 – $230

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SLIDE 32

Platinum Platinum 2005 2005

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