The world’s second-biggest platinum group metal (PGM) producer on Thursday posted headline earnings of R732 million ($41.68 million) in the year ended June 30, down from the previous year, hit by lower sales volumes and tepid metal prices.

However, platinum prices have rallied since June, driven by Chinese imports and declining supply from major producer SA. This followed earlier heavy flows into NYMEX exchange stocks on fears platinum would be hit by United States (US) import tariffs.

Muller told analysts that while Impala sees a price supportive environment for the next 12 to 18 months, producers must be “responsible in terms of how we destock our excess inventory and how we bring new production online”.

“We therefore exercise a more cautious approach to how we deal with the current 30% increase of the last three months in PGM prices,” Muller said.

He added that producers of PGMs, which are mostly used in catalytic converters that curb toxic emissions in vehicles, still faced a major threat despite the lower-than-projected adoption of electric vehicles.

“We do not support a flood of new ounces to increase the supply. We don’t think there’s any sense in oversupplying an oversupplied market,” he added.

If the price momentum continues, Impala would consider reinstating some life of mine extension projects, while maintaining its levels of production around 3.4 million ounces, Muller said.

Impala could also rethink the planned closure of its Canadian palladium mine, set for next year, although the investment needed for a multiple-year extension would require the metal’s prices to be sustained around $1 400.

Palladium prices, which peaked at $3 440 an ounce in March 22 after top producer Russia invaded Ukraine, are currently trading around $1 097 an ounce.

–Reuters–