Johannesburg - South Africa’s gauge of platinum-mining stocks fell to the lowest since July 2013 as the world’s three-biggest producers struggle to recover from a five-month strike and as metal prices retreated.
The six-member FTSE/JSE Africa Platinum Mining Index fell 2.1 percent to 39.70 by 1:18 pm in Johannesburg, a third day of declines.
More than two times the three-month daily average of shares were traded, while the gauge’s 14-day relative strength index fell to 22.3, the lowest since April 2013.
Spot platinum retreated 12 percent from this year’s peak reached on July 10, about two weeks after a stoppage by about 70,000 workers ended.
“In addition to the lost production and the cost problems, you’ve also got a weak platinum price,” Garth Mackenzie, founder of Traderscorner.co.za, said by phone today from Johannesburg.
“The palladium price has also been breaking lower recently, that’s also bad news for these stocks.”
Producers including Anglo American Platinum, Lonmin and Impala Platinum, which supply more than two-thirds of the world’s mined platinum, are reviewing growth plans and are putting mines up for sale after the strike over wages.
Amplats is the worst performer on the platinum index today, falling 3 percent to 387.12 rand.
Impala retreated 2.1 percent to 88.57 rand.
None of the gauge’s members gained.
The spot price of palladium fell 0.4 percent to $807.42 (R9,010) per ounce, while platinum dropped 0.6 percent to $1,328.50.
The metals are used to make catalytic converters, which curb harmful emissions from cars.
Palladium is mostly used in gasoline vehicles and platinum is favored for diesel types. - Bloomberg News