th May 2011 May 2011 16 th 16 www.platinum.matthey.com DISCLAIMER - - PDF document

th may 2011 may 2011
SMART_READER_LITE
LIVE PREVIEW

th May 2011 May 2011 16 th 16 www.platinum.matthey.com DISCLAIMER - - PDF document

th May 2011 May 2011 16 th 16 www.platinum.matthey.com DISCLAIMER Johnson Matthey PLC endeavours to ensure the accuracy of the information and materials contained within this presentation, but makes no warranty as to accuracy, completeness or


slide-1
SLIDE 1

www.platinum.matthey.com

16 16th

th May 2011

May 2011

slide-2
SLIDE 2

www.platinum.matthey.com

DISCLAIMER

Johnson Matthey PLC endeavours to ensure the accuracy of the information and materials contained within this presentation, but makes no warranty as to accuracy, completeness or suitability for any particular purpose. Johnson Matthey PLC accepts no liability whatsoever in respect of reliance placed by the user on information and materials contained in this presentation, which are utilised expressly at the user’s own risk. In particular, this presentation and the information and materials in this presentation are not, and should not be construed as, an offer to buy or sell or solicitation of an offer to buy or sell, any regulated precious metal related products or any other regulated products, securities or investments, or making any recommendation or providing any investment or other advice with respect to the purchase, sale or other disposition of, any regulated precious metal related products or any other regulated products, securities or investments including, without limitation, any advice to the effect that any precious metal related transaction is appropriate or suitable for any investment objective or financial situation of a prospective investor. A decision to invest in any regulated precious metal related products or any other regulated products, securities or investments should not be made in reliance on any of the information or materials in this presentation. Before making any investment decision, prospective investors should seek advice from their financial, legal, tax and accounting advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. This presentation does not, and should not be construed as acting to, sponsor, advocate, endorse or promote any regulated precious metal related products or any other regulated products, securities or investments.

slide-3
SLIDE 3

www.platinum.matthey.com

Platinum Platinum

slide-4
SLIDE 4

www.platinum.matthey.com

Platinum: key features 2010 Platinum: key features 2010

  • The platinum market was close to balance in 2010
  • Supplies rose slightly to 6.06 million ounces
  • Gross demand increased by 16% to 7.88 million ounces

with heavy purchasing by the automotive and industrial sectors

  • Net physical investment demand remained robust but was

almost flat compared with 2009

  • Jewellery demand fell by 14% due to high prices and full

manufacturer stock levels

  • Recycling increased by a third to 1.84 million ounces
slide-5
SLIDE 5

www.platinum.matthey.com

Platinum supply and demand Platinum supply and demand

20 635 Movement in stocks 12.1 6,040 5,390 Net Demand 31.0 (1,840) (1,405) Recycling 16.0 7,880 6,795 Gross Demand 0.6 6,060 6,025 Supply % change 2010 2009 ‘000 oz

slide-6
SLIDE 6

www.platinum.matthey.com

Platinum supplies rose by 0.6% Platinum supplies rose by 0.6%

  • South African supplies remained

flat at 4.64 million ounces

  • Russian supplies increased by

40,000 oz

  • North American shipments fell
  • Supplies from Zimbabwe grew by

50,000 oz

1 2 3 4 5 6 7

2009 2010 South Africa Russia North America Others

million oz

6.03 6.06

slide-7
SLIDE 7

www.platinum.matthey.com Million oz

1 2 3 4 5 6 7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

South Africa Russia North America Others

Platinum supply by region Platinum supply by region

slide-8
SLIDE 8

www.platinum.matthey.com

Gross platinum demand rose by 16% Gross platinum demand rose by 16%

  • Autocatalyst demand surged by

43% to 3.13 million ounces

  • Industrial demand climbed by

48% to 1.69 million ounces

  • Jewellery demand declined

relative to 2009

  • Physical investment demand

remained robust

1 2 3 4 5 6 7 8 9 2009 2010

Autocatalyst Jewellery Industrial Investment

million oz 6.80 7.88

slide-9
SLIDE 9

www.platinum.matthey.com

Platinum demand: Gross autocatalyst Platinum demand: Gross autocatalyst

Global demand for platinum in autocatalysts in 2010 increased by 940,000 oz. This increase was made up of:

  • Europe:

495,000 oz

  • Japan:

150,000 oz

  • North America:

115,000 oz

  • Rest of World:

160,000 oz

  • China:

20,000 oz

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

2009 2010 Europe Japan North America China Rest of the World

million oz

2.19 3.13

slide-10
SLIDE 10

www.platinum.matthey.com

European light duty vehicle production profile European light duty vehicle production profile

2009 2010 Diesel 38% Diesel 48% Gasoline 62% Gasoline 52%

Sources: Johnson Matthey / IHS Global Insight

slide-11
SLIDE 11

www.platinum.matthey.com

Industrial platinum demand grew by 48% Industrial platinum demand grew by 48%

  • Strong purchasing by the

chemical industry as plants run at higher capacity

  • Electrical demand driven by

sales of hard disk drives

  • Expansion of glass production

facilities to meet consumer demand (glass fibre, LCD panels)

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2009 2010

Chemical Electrical Glass Medical and Biomedical Petroleum Other

million oz 1.14 1.69

slide-12
SLIDE 12

www.platinum.matthey.com

Gross platinum jewellery demand Gross platinum jewellery demand fell by 14% fell by 14%

  • Platinum jewellery demand in

China down 20% due to high prices and adequate stocks

  • More consumer confidence in

Japan, but trend towards lighter weight platinum pieces

  • Growth in USA and India

0.0 0.5 1.0 1.5 2.0 2.5 3.0

2009 2010 Europe Japan North America China Rest of the World

million oz 2.81 2.42

slide-13
SLIDE 13

www.platinum.matthey.com

Platinum investment demand was robust Platinum investment demand was robust

  • Net ETF investment demand

grew to a record 570,000 oz

  • Strong growth in physical

demand from US-based ETF (launched January 2010)

  • Growth in European ETFs was

tempered by some liquidation

  • Demand for Japanese large bars

lower than in 2009

100 200 300 400 500 600 700

2009 2010 Europe Japan North America Rest of the World

'000 oz 660 650

slide-14
SLIDE 14

www.platinum.matthey.com

Platinum ETF demand Platinum ETF demand

0.0 0.5 1.0 1.5 Cumulative Holdings (million ounces) $600 $900 $1,200 $1,500 $1,800 $2,100 $2,400 Price ($/oz) ETFS‐London ZKB JB ETFS‐US Price

2007 2008 2009 2010 2011

slide-15
SLIDE 15

www.platinum.matthey.com

Platinum recycling increased by 31% Platinum recycling increased by 31%

  • Higher recycling of spent

autocatalysts driven by higher metal prices, returns from scrappage schemes, and higher sales of new vehicles

  • Strong growth in jewellery

recycling in China and Japan

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

2009 2010 Autocatalyst Electrical Jewellery

million oz 1.41 1.84

slide-16
SLIDE 16

www.platinum.matthey.com

Platinum outlook Platinum outlook

  • Modest rise in platinum supplies forecast, with cautiously
  • ptimistic outlook for South African production in 2011
  • Gross automotive and industrial demand for platinum to

increase as economic growth continues, but Japanese disaster may have some lingering effects locally

  • Jewellery and investment demand to date suggests these

sectors will be resilient

  • Platinum expected to remain close to balance in 2011
slide-17
SLIDE 17

www.platinum.matthey.com

Platinum price forecast: Platinum price forecast: the next six months the next six months

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400

JM Base Prices (US$ per ounce)

2008 2009 2010 2011

$1,750 $1,870 $2,000

slide-18
SLIDE 18

www.platinum.matthey.com

Palladium Palladium

slide-19
SLIDE 19

www.platinum.matthey.com

Palladium: key features 2010 Palladium: key features 2010

  • The palladium market was in a deficit of 490,000 oz in 2010
  • Supplies rose slightly. Russian state stock sales totalled

1 million ounces

  • Gross demand reached a record high of 9.63 million ounces

with strong growth in the autocatalyst sector

  • Industrial palladium demand increased by 3%
  • Net physical investment demand reached a record level of

1.09 million ounces

  • Recycling increased by 29% to 1.85 million ounces
slide-20
SLIDE 20

www.platinum.matthey.com

Palladium supply and demand Palladium supply and demand

(490) 680 Movement in stocks 21.2 7,780 6,420 Net Demand 29.0 (1,845) (1,430) Recycling 22.6 9,625 7,850 Gross Demand 2.7 7,290 7,100 Supply % change 2010 2009 ‘000 oz

slide-21
SLIDE 21

www.platinum.matthey.com

Palladium supplies rose by 3% Palladium supplies rose by 3%

  • South African supplies

increased by 9%

  • Newly mined Russian

supplies increased by 45,000

  • z
  • Sales of Russian state stocks

were once again at around 1 million ounces

  • North American supplies fell

1 2 3 4 5 6 7 8

2009 2010

South Africa Russia North America Others

million oz 7.10 7.29

slide-22
SLIDE 22

www.platinum.matthey.com

Gross palladium demand Gross palladium demand increased by 23% increased by 23%

  • Gross demand increased to a

record 9.63 million ounces

  • Autocatalyst demand increased by

35% with double-digit growth in all regions

  • Investment demand reached a

record 1.09 million ounces

  • Industrial demand grew by 3%
  • Jewellery demand fell by 20%

1 2 3 4 5 6 7 8 9 10

2009 2010 Autocatalyst Jewellery Industrial Investment

million oz 7.85 9.63

slide-23
SLIDE 23

www.platinum.matthey.com

Palladium autocatalyst demand Palladium autocatalyst demand rose by 35% rose by 35%

Vehicle production grew in all regions, driving up palladium

  • demand. Key features:
  • Recovery in North America
  • Growth in China
  • Substitution
  • Exports from Europe

1 2 3 4 5 6

2009 2010 Europe Japan North America China Rest of the World

million oz 4.05 5.45

slide-24
SLIDE 24

www.platinum.matthey.com

Chinese annual light duty Chinese annual light duty vehicle imports from Europe vehicle imports from Europe

Source: China Automotive Information Net

50 100 150 200 250 300 350 400

2006 2007 2008 2009 2010

'000 units

slide-25
SLIDE 25

www.platinum.matthey.com

Industrial palladium demand grew by 3% Industrial palladium demand grew by 3%

  • Use of palladium in the chemical

industry rose by 22% with higher consumer demand for plastics and other products

  • Dental demand softened
  • Electrical demand increased,

building on a strong second half

  • f 2009

0.0 0.5 1.0 1.5 2.0 2.5 3.0

2009 2010 Chemical Dental Electrical Other

million oz 2.40 2.47

slide-26
SLIDE 26

www.platinum.matthey.com

Gross palladium jewellery demand Gross palladium jewellery demand fell by 20% fell by 20%

  • Manufacturing fell by around a

third in China

  • Retailer and consumer demand

declining

  • Palladium jewellery grew in

Europe and North America, particularly in the men’s wedding band market

100 200 300 400 500 600 700 800 900

2009 2010 Europe Japan North America China Rest of the World

'000 oz 775 620

slide-27
SLIDE 27

www.platinum.matthey.com

Palladium investment demand grew to Palladium investment demand grew to unprecedented levels unprecedented levels

Physical investment demand for palladium grew by 74%, reaching 1.09 million ounces:

  • Heavy buying into the new US-

based palladium ETF

  • New investment in Europe was

more than offset by liquidation in mature funds

  • 0.2

0.0 0.2 0.4 0.6 0.8 1.0 1.2

Europe North America

2009 2010

million oz 0.63 1.09

slide-28
SLIDE 28

www.platinum.matthey.com

Palladium ETF demand Palladium ETF demand

0.0 0.5 1.0 1.5 2.0 2.5 Cumulative Holdings (million oz) $150 $210 $270 $330 $390 $450 $510 $570 $630 $690 $750 $810 $870 Price ($/oz) ETFS‐London ZKB JB ETFS‐US Price

2007 2008 2009 2010 2011

slide-29
SLIDE 29

www.platinum.matthey.com

Palladium recycling Palladium recycling

  • Higher returns of end-of life

vehicles led to recycling of autocatalysts increasing by 38%

  • Jewellery recycling increased by

14%

  • Electrical recycling, mainly in

Europe, rose by 11%

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

2009 2010

Autocatalyst Electrical Jewellery million oz 1.41 1.85

slide-30
SLIDE 30

www.platinum.matthey.com

Palladium outlook Palladium outlook

  • Supplies of palladium are forecast to decrease overall, sales

from Russian state stocks are expected to be lower than in each of the last three years

  • Palladium demand is expected to grow in line with higher

purchasing by the automotive and chemical sectors, particularly in emerging markets

  • Chinese jewellery demand and global investment outlook are

both less certain

  • Palladium is anticipated to be in deficit again in 2011
slide-31
SLIDE 31

www.platinum.matthey.com

Palladium price forecast: Palladium price forecast: the next six months the next six months

$715 $825 $975

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 JM Base Prices (US$ per ounce) 2008 2009 2011 2010

slide-32
SLIDE 32

www.platinum.matthey.com

Rhodium Rhodium

slide-33
SLIDE 33

www.platinum.matthey.com

  • Supplies of rhodium fell

slightly due to a build up

  • f pipeline stocks in

South Africa

  • Production in North

America fell due to labour problems and poor grades

  • Supplies from Zimbabwe

increased

Rhodium supplies fell by 3% Rhodium supplies fell by 3%

100 200 300 400 500 600 700 800

2009 2010 South Africa Russia North America Others

'000 oz 770 751

slide-34
SLIDE 34

www.platinum.matthey.com

  • Autocatalyst demand for

rhodium increased by 17% to 724,000 oz

  • Glass demand rose by 200%

due to increase in manufacture

  • f LCD panels
  • Expansion in the chemical

sector led to increased demand for rhodium catalysts

Rhodium demand increased by 22% Rhodium demand increased by 22%

100 200 300 400 500 600 700 800 900 1,000

2009 2010 Autocatalyst Chemical Glass Other

'000 oz 716 873

slide-35
SLIDE 35

www.platinum.matthey.com

  • Returns from end-of-life

vehicles stimulated by higher pgm prices

  • Impact of national car

scrappage schemes continued to be felt as scrap catalysts were processed through 2010

  • Rhodium market surplus fell

by 53% to 114,000 oz

Rhodium autocatalyst recycling Rhodium autocatalyst recycling increased by 26% increased by 26%

50 100 150 200 250

2009 2010

'000 oz 187 236

slide-36
SLIDE 36

www.platinum.matthey.com

16 16th

th May 2011

May 2011