Kudos to this mining company's quarterly updates. It provides investors with an excellent indication of what is happening in the metals markets. It would be of great help if the other miners did the same.
The average PGM contained metal basket price (per ounce) for the three months to end 31 December 2017 was USD865 (ZAR11 827), which was USD40 an ounce higher than the USD825 (ZAR10 866) achieved in the quarter to end 30 September 2017. PGM basket prices continued to reflect improvements in spot palladium and rhodium prices with palladium comprising 16.6% and rhodium comprising 9.4% of the Tharisa basket.
Spot palladium prices averaged USD993 per ounce in Q1 FY2018, ending the calendar year at USD1 057 an ounce, while spot rhodium prices averaged USD1 351 per ounce in Q1 FY2018, ending the calendar year at USD1 470 an ounce. Spot palladium prices increased 58.0% and rhodium prices increased 52.6% in 2017.
Contracted metallurgical grade chrome concentrate prices increased 4.1% to USD179 per tonne from USD172 per tonne in the previous quarter due to improved liquidity and consistent stock levels at ferrochrome and stainless steel producers in China. Current metallurgical chrome spot prices are above USD200 per tonne for February 2018 shipment.
As at 29 December 2017, Chinese port stock levels were at 2.2 Mt, or approximately two months' supply into the ferrochrome and stainless steel industry. The market fundamentals for chrome remain sound with continued growth forecast for the global stainless steel industry.
Specialty chrome concentrates, which comprise 24.1% of Tharisa's total chrome production, continued to attract a premium above the contracted metallurgical chrome concentrate prices.
The share price has reacted nicely as a result. Up 21% in a week.