Entire Annual Report - Anglo American Platinum

PALLADIUMStill more pronounced than in the case of platinum were the upward trend and volatility of the palladium price. Openingthe year at around US$440 per ounce, the palladium price surged to US$800 on 21 February in response to strong demandand a shortage of Russian metal. It then declined on rumours that Russian export quotas had been signed and reached alow point of US$553 on 11 April. After a period of consolidation at just below the US$600 level, the price rose stronglyagainst the background of firm demand, though with marked fluctuations due chiefly to conflicting reports as to theavailability of Russian supplies, and attained a new record level of US$972 on 27 December. It then breached theUS$1 000 level in January 2001 reaching a high of US$1 085 but has subsequently weakened as a result of the resumptionof Russian sales. The average price per ounce realised by Anglo Platinum during the year was US$675 (1999 : US$358).RHODIUMThe rhodium price was influenced by factors similar to those that affected the prices of platinum and palladium. A lack ofRussian metal coupled with firm demand resulted in a 6-year high of some US$1 400 per ounce being reached in January2000. In extremely tight conditions the price peaked at US$2 500 in February before declining sharply to below US$2 000by the end of the month as buying pressure dissipated. Renewed buying and a shortage of Russian metal then led to ageneral recovery in the price to US$2 600 on 6 August before it declined to US$1 650 in response to heavy Russian sales.Once Russian offers were withdrawn, the price rebounded strongly, reaching US$1 725by the end of October. Firm demand and a decline in Russian offers underpinned theprice for the rest of the year, by the end of which rhodium had consolidated at aroundthe US$2 000 level. The average price per ounce realised by Anglo Platinum duringthe year was US$1 847 (1999 : US$894).Market developmentThe growth and development of the platinum market are a cornerstone of AngloPlatinum’s strategy. Considerable funds are allocated to ongoing research anddevelopment to ensure that platinum’s position at the forefront of industrial andautomotive applications is consolidated and strengthened.Via the Platinum Guild International (PGI), large-scale market campaigns are necessaryto nurture platinum’s position in existing jewellery markets and to develop new ones.The success of PGI’s activities is apparent from the growth of platinum jewellerymarkets over the past ten years, particularly China and the United States of America.In concert with other major South African platinum producers, under the auspices ofthe International Platinum Association (IPA), the PGI launched a platinum jewellerypromotion campaign in India in 2000. The PGI are to be congratulated on theirprofessionalism and effectiveness in carrying out their mandate.Market outlookProvided the restrained Russian selling pattern and a sound global economic climatepersist, platinum group metal markets are expected to be firm in the medium term,given their sound demand fundamentals.Continuing promotion of platinum in the jewellery sector is expected to secureplatinum’s sound position, particularly in the bridal sector, which will help offsetdifficult conditions at the less expensive end of the market.13