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Top tiger … receivables that lag behind are all subject to change as I am sure you are fully aware (or not) 47m of sales are subject to forward price conditions …. Fair enough when the price is going up but you try to renegotiate when prices are decreasing by 50% …. I hear buyers saying but I bought in good faith at 27000 but is now 14000 …. and falling and we had an open deal remember? I’ll pay the going price when I actually pay by whilst the price is going down … I won’t pay until I want to (when the price starts to rise) maybe SLP need to sell at their price or not at all ….. ok when it’s going up but disaster when it’s falling
Todays prices RHODIUM USD/OZ 14200 on Metals Daily - the average price for 1st quarter was usd/oz 17999
The basket price for 1st quarter was $2900 and for the 2nd quarter to date on average it is $2444 and based upon todays value it is $2350. I'm just making logic of the SP and what to look out for in terms of future value today there's a legitimate reason for the low sp mixed with actual prices of PGMs the lower production and outside effects. If 129 was the value during $3700 average basket prices of 2021 then 84p should be a fair value today.
PGMs BASKET PRICE FELL BY 29% in the last quarters figures - here's all the figures JULY 2020- SEPT 2021
1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022
Feeds in tonnes 680,662 740,783 644,087 635,153 600,000
PGMs in ounces 24,300 24,900 23,600 21,200 20,397
Basket price $2,834 $3,323 $4,576 $4,059 $2,897
Net Revenue $millions $41.5 $43.7 $74.2 $48.4 $29.8
Velo Thanks for your interpretation of the way things are going albeit through the use of somewhat rosy figure work. The falling price of PGMs at the moment is a double edge sword as you know by last quarters price adjustment to debtors and unfortunately there's more to follow.
Whilst the price of the PGMs basket is falling it not only means that the current profit is falling it also means that past sales will receive a credit on their invoice (difference between todays price and their provisional price at the time of order/delivery).
This is the bit in the financial statement:
Commodity price risk refers to the risk of changes in fair value or cash flows of financial instruments as a result of changes in commodity prices.
It is applicable to the largest debtor of the Group. In terms of the agreement between the Group and the debtor, the commodity prices used in the calculation of the payment are based on the prices over the period following delivery, leaving the Group exposed to the commodity price fluctuations until the price is fixed. The subsequent remeasurement of the receivable every month following the month of delivery until the price is fixed, is recognised in other income, refer note 9.
The balance on the 2021 year end was $47m and a provision of 10% was mentioned as a risk but looking the basket prices from July 2020 to Sept 2021 it shows why 2021 was such a good result with increasing prices there was always a higher profit except in the 4th Quarter and THEN the dramatic change seen in the 1st quarter of 2022 - save you looking them up 1st 2021 $2834, 2nd $3323, 3rd $4576, 4th $4059, 1st 2022 $2897 - so you see a worrying downturn in the 1st quarter is carrying on into the 2nd quarter. Net revenue was still $29.8 million. However if the basket price in the 2nd quarter continues to fall say to BELOW THE CURRENT APPROX $2400 then revenues will need to be adjusted downwards again.
It wouldn't be so bad if production was up but it is also on a falling trend since April 2018 and here's the figures in thousands of oz up until Sept 2021 25.7, 20, 22.2, 29.2, 27.7, 25.4, 26.58, 12.51(covid lockdown), 24.3, 24.9, 23.6, 21.2, 20.40
This three way hit is whats keeping the SP down: credit notes, falling prices and lower production. The management are ramping up production again but can't yet do anything about the price of PGM's but the ramping up has hit a Covid uncertainty threat so thats why the volatility in SP in the last few days. I am invested here and have had a nice profit over the years including dividend and am not worried about the future I'm just pointing out why I think the SP is lower today.
I couldn’t believe reading this and putting all I’ve researched into doubt, someone tell me this is just another headline seeker.
Impala Platinum Is Starting To Look Like A Value Trap And I'm Turning Bearish
Sep. 16, 2021 9:01 AMImpala Platinum Holdings Limited (IMPUF)SBSW, ZMPLF, TSLA
The company booked revenues of $8.49 billion and adjusted EBITDA of $4.01 billion in FY21, up by 86% and 109% YOY, respectively.
However, rhodium and palladium accounted for 72% of Impala Platinum’s sales and the prices of the two metals are crashing.
There is likely more pain ahead as there is no end in sight for the global chip shortage and BEV sales are expected to double in 2021.
I doubt rhodium and palladium demand and prices will recover and now I’m bearish on Impala Platinum.
The trouble is there's no good news coming out of S Africa and there's also been a disaster at one of Impala's mines in Rustenburg due to mudslides
quote news24.com Five mineworkers were missing on Sunday following a mudslide at a South African platinum mine northwest of Johannesburg, operator Impala Platinum (Implats) announced.
Seven employees were working at the bottom of a shaft at the mine in Rustenburg, "when the area became inundated as a result of a mud rush," Implats said in a statement.
COVID variant wipes £72billion off London shares … African miners are in the firing line. … but SLP have a Teflon coat? Let them drive this one back down to 66p and Im selling the house (again) did it once and it worked.
I called the rebound today on outside matters and really do believe that most investors here are worried about “what could go wrong” We made $100m last year on a spike and next year it maybe $50m … a 50% drop by…. Will be reported but really $50m net profit ? think about it and then look at your other investments … I think milking the cow every day is the way to go and when we have double the cash in share value let’s just pay ourselves out and go on holiday… it could be sooner than we think
Lack of workers during the pandemic caused shortages in the chip industry which caused the car industry to shut down production due to NO stock on a Just in time Industry. General motors shut down and the US Government got involved and have opened new Fabs to ensure this doesn’t happen again. USA have invested billions. China in the meantime warned against manipulation and then wanted to control/invade Taiwan for theirl chip industry. India meanwhile are invested too… it takes time to build the new fabs but everything will be back on track in the new year. This is the reality and demand will be amazing for PGMs … BUT when other factors such as speculation into futures are shorted it makes a mockery of demand BUT (another big but) means the shorters have to buy back and the new FABS need PGMs . The book orders for new cars are growing and something has to give and I think it’s going to be a mighty explosion. We know there’s a shortage of cars and when you put all the parts together there’s going to be a mighty Elon Musk sell off of his own shares while he piles into PGMs
We should be back to £1.02 tomorrow for starters .
The World Platinum Investment Council said yesterday jewellery demand was expected to increase 13% year-on-year after a 13% drop in 2020. Overall demand for platinum was set to total 7.9Moz in 2021, resulting in a market deficit of 60,000oz, the council had said earlier this month.
Hochschild (UP - + 20% today) has now almost FULLY recovered from the Paddington Bear mauling it took and I think we'll follow suit here as confidence is restored and the rule of law has returned. Nothing more to fear here even Platinum Jewellery is making a big comeback for Christmas I might scrap the Mini and convert the catalytic converter into a necklace.
One of the reasons for the recent drop was caused by Peru putting the fear into the mining world having told HOC to pack their bags. Their shares tanked 75% and sent a wave of selling throughout the world after all if could happen to HOC then what’s to stop other countries from breaking the rule of law? But now the Peruvian government have clarified the situation and restored order. All miners should recover today including the darling of them all.
current PGMs basket value x 70,000 oz should by my reckoning equate to $118m net revenue which should be their 2nd most successful year even at todays levels.
$29.8m already achieved for 1st quarter at basket value $2897 leaving 54,229 ozs at $2,500 current basket.
Sorry I'll try to make it a little clearer and type slower.
The price of Platinum has risen by over 3.5% in the past few hours as has Palladium but the SP hasn't yet caught up. Surely by now with all the good news i.e. the 4p dividend to be paid next month and the windfall dividend paid in April and the greater demand for PGM's this has to be the biggest gift horse in town ( a good buy). I am fully satisfied with my milking cow (my long term investment ) and the $30m net revenue from the 1st quarter this year is an excellent result but it will pivot upwards from here. Now watch the Rhodium price rise as that makes up 50% of income and Palladium 50% of the basket and 20% of income.
All good news and not a dissatisfied investor to be seen.
Is this the start of a big correction in PGMs surely demand has to push prices up especially as we haven't had a special special divi for a long time, a few months ago and OK we got another 4p last quarter but we have been used to being spoiled. $30m a quarter isn't enough.