德银-南非-贵金属市场-4季度南非贵金属：适度赤字出现-20171012-Deutsche_Bank-SA_Platinum4Q17_SA_Platinum,modest_deficits_emerging_34页-3mb

2017-2018 SA Platinum Sector Summary

Core Content

This report outlines the performance and outlook for the South African Platinum sector as of 12 October 2017. It includes updated price forecasts, recommendations, and valuation metrics for key platinum producers.

Main Points

• Price Forecast Upgrades: The report forecasts a modest recovery in platinum prices in 2018 to US$1,088/oz, up from the current US$914/oz. This is driven by the expectation of modest industrial deficits and supply cuts in response to low prices.
• Palladium and Rhodium Performance: Palladium and rhodium have shown strong performance in 2017, with year-to-date increases of 31% and 61%, respectively, leading to price forecast upgrades for these metals in 2018.
• Company-Specific Changes:
  • Impala Platinum: Upgraded from Hold to Buy, with a 9% increase in price target.
  • Amplats: Maintained as a Buy with a 6% increase in price target.
  • Lonmin: Maintained as a Sell, but with a 19% increase in price target.
  • Northam: Maintained as a Hold with a 13% increase in price target.
  • RBPlat: Maintained as a Hold with a 3% increase in price target.
• Earnings Forecasts: Earnings forecasts for 2017 and 2018 have been upgraded, but only Amplats is expected to be profitable across both years.
• Valuation Metrics: Under DB forecasts, the sector is fairly valued at 0.9–1.1x P:NPV. Amplats remains the only company with a positive NPV, while others are FCF-negative.
• Market Balance: The platinum sector is expected to transition from surplus to deficit in 2018, with continued supply cuts from certain mines and a shift in the Rand-Basket price towards long-run PGM ratios.

Key Information

Commodity Forecasts

• Platinum: Expected to rise to US$1,088/oz in 2018.
• Palladium: Forecasted to increase to US$930/oz in 2018.
• Rhodium: Forecasted to increase to US$1,000/oz in 2018.
• Rand-Basket Price: Expected to rise by 4% in 2017 and 5.6% in 2018.

Company-Specific Changes

Valuation Metrics

Outlook

• 2018 Outlook: More favorable than 2017, with platinum expected to catch up with palladium and rhodium in price performance.
• Supply and Demand: Supply cuts are beginning to impact the market, and the sector is expected to move into a modest deficit in 2018.
• Sector Valuation: The sector is fairly valued at 0.9–1.1x P:NPV under DB forecasts, with Amplats being the only company with a positive NPV.

Summary

The platinum sector is showing signs of recovery in 2018, with price forecasts upgraded due to modest deficits, marginal cost support, and supply cuts. Impala Platinum is upgraded to a Buy, while Amplats remains the only profitable producer. The sector is relatively fairly valued, and the outlook for 2018 is more favorable than 2017.