The latest round of wage talks between the negotiating teams of Amcu and the platinum producers, which are being conducted under the auspices of South Africa’s Commission for Conciliation, Mediation and Arbitration (CCMA), were adjourned “as the parties were unable to reach a settlement”, according to a Feb. 5 joint statement from the producers.
Spot platinum gained 0.7 percent on Feb. 5 to $1,379.40 an ounce and spot palladium to $705.40 an ounce. Spot platinum had surged briefly to a three-month high of $1,469.50 on Jan. 20 after Lonmin’s Amcu members voted to join Amplats and Implats mine workers in their strike.
Platinum futures for April on the Comex division of the New York Mercantile Exchange (Nymex) finished at $1,256.90 an ounce at midweek, while palladium for March delivery closed at $707.10 an ounce.
The three producers are reported to be losing around 9,900 ounces of platinum daily in lost output since the walkout began on Jan. 23. The CEOs of the three companies, Chris Griffith (Amplats), Terence Goodlace (Implats) and Ben Magara (Lonmin), in their combined companies’ statement Feb. 5, noted that around 45 percent of platinum operations in South Africa failed to break even prior to the start of the strike and before granting wage increases currently under discussion. They warned that “prolonged strike action will result in more losses and further fundamental restructuring.”
There are concerns too another strike is looming. A second union, the National Union of Metal Workers of South Africa (Numsa), has said it plans to serve a 48-hour notice for strike action at Amplats. Numsa is the largest union at the company’s South African refineries and smelters. At time of writing, the union had still to issue a strike notice.
Gold futures were higher at midweek, helped by the release of a raft of positive U.S. economic data. Gold for April delivery on the Comex division of Nymex touched on Feb. 5, the highest since Jan. 27, before settling at $1,256.90 an ounce.
Meanwhile, copper prices on the London Metal Exchange edged higher at midweek to finish at $7,060 a tonne after the benchmark three-month price hit a two-month low of $7,016 a tonne on Feb. 4. Copper prices have been under pressure for the past two weeks or more, amid China and other emerging market concerns weighing on demand, analysts said.
Three-month copper had closed last week at $7,065 a tonne, down over $142 on the previous week’s close at $7,027 a tonne.
Price falls though have been limited by concerns over a lack of short-term supply in the physical market amid low inventories of the red metal in of copper in LME-registered warehouses. Copper stocks in LME-registered warehouses have been falling steadily since September, and are now at their lowest level in a year at 311,225 tonnes. The short-term supply concerns have been reflected in the premium of cash copper prices against the three-month price since late last year. At close on Feb. 5, LME cash copper was trading at a $36 dollar premium over the three-month price.
Meanwhile, U.S. crude prices were largely unchanged on the week, with the benchmark West Texas Intermediate (WTI) for March delivery ending at $97.38 a barrel on Feb. 5. Brent North Sea crude gained 47 cents at mid week to $106.25 a barrel after three straight sessions of losses on London-based ICE Futures Europe exchange.
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