We definitely subscribe to the well-documented fact that both nickel and platinum, at current prices, cannot support the sustainable operations of many current nickel and platinum producers and, therefore, agree that there will be upward pressure on both nickel and platinum prices in the medium to longer term.
We do agree that neither nickel nor platinum will, in the medium term, see the very high prices obtained during the beginning of last year and the year before. We remain optimistic on the long term fundamentals for both metals.
Nickel is supported by stainless steel demand as an environmentally stable product with great application in specialized steels such as used in engineering, construction, food and liquid processing industries. Demand will recover as economies pick up again, and of course the emerging BRIC (Brazil, Russia, India, China) economies present enormous future demand opportunities.
Similarly for platinum group metals, which people forget are really industrial metals, linked to the automobile and the industrial sectors and demand therefore follows the economic cycles very closely. There will be a recovery in automobile demand and increasing adherence to EU emission regulations ensures a firm demand for PGMs in autocatalysts, including increasing demand from diesel cars. However, this demand increase will only follow recovery in the major economies.
Braemore’s distinctive competitive advantage lies in the unique technology that it has proprietary access to, both in the PGMs and nickel markets.