Platinum shares take a hammering after news of drop in car sales in India and China
JOHANNESBURG – Platinum stocks eased on Tuesday as news of the bleak car sales from India and China weighed heavily on platinum shares.
Impala Platinum led the rout, declining 5.97 percent to R81.05 a share, followed by Anglo American Platinum with 3.66 percent lower at R839.81. Sibanye-Stillwater fell 2.66 percent to R17.20, and Northam Platinum traded 3.54 percent weaker at R72.74.
Anchor Capital investment analyst Seleho Tsatsi said that news of the 41 percent decline in India’s car sales for August was one of the factors that contributed to the fall in the shares.
“Autocatalysts account for about 40 percent of platinum demand and more than 80 percent of palladium and rhodium demand. The decline of car sales in China by close to 10 percent and India by 41 percent is thus obviously negative for demand,” said Tsatsi.
India, one of the world’s promising car industries owing to its growing middle class, recorded the worst-ever monthly fall in car sales in August.
The country sold 115 000 cars last month, down by 41 percent from a year earlier, the Society of Indian Automobile Manufacturers said on Monday.
The China Passenger Car Association also said that sales of sedans, sport vehicles, minivans and multi-purpose vehicles fell 9.9 percent to 1.59 million units during the period.
Chinese car makers are under strain amid the country’s slowing economic growth and trade tensions with the US.
In July Chinese cities and provinces implemented an emission standard which requires cars to have better filtering systems and for trapping exhaust gases.
The move was the sixth stage of an emission standard rolled out in 2001 by Beijing in a bid to push the country’s auto industry to catch up with Europe’s.
On Tuesday, the Association of Mineworkers and Construction Union (Amcu), the biggest union in the platinum industry, said that it declared a dispute with big producers such as Sibanye-Stillwater and Anglo American Platinum.
Amcu said that it had backed down on its initial demand for a 48 percent a monthly wage hike after members gave the union a fresh mandate of R1 500 a year.
Amcu, which led a bruising five month wage strike at Sibanye-Stillwater’s South African gold operations that ended in April, said it had a change of heart following a mass meeting held last week.
Meanwhile the gold price yesterday traded at the same levels it was a month ago after losing 0.18 percent to reach $1 496 an ounce.
Pan African lost 4.37 percent at R2.19 a share, AngloGold Ashanti weakened by 1.68 percent at R298.34 a share. Harmony Gold was 0.47 percent stronger at R48.69, but Gold Fields fell 1.52 percent to R74.69 a share. Gold reached $1 560 last week and has since been on the decline. The gold price, which reached multi-year highs this year, is expected to bail out South African-listed producers that have previously struggled.