Only US platinum, palladium producer on massive tear
Stillwater Mining (NYSE:SWC) shot up more than 7% on Monday, as investors look for alternative suppliers of PGMs amid a prolonged strike in South Africa and rising tensions between Russia and the West.
In early afternoon dealings the Billings Montana-based company was changing hands for $16.46, up 6.1% on the New York Stock Exchange, slightly off its highs for the day.
Just under 3 million shares in the $2 billion counter were traded by 2:15EST, equal to the usual daily average. Stillwater shares are up by a third since the start of the year.
Cash-flush Stillwater is the only platinum and palladium producer in the US and accounts for 6% of global palladium production and 2% of the world's platinum supply from its two producing mines.
The company boasts more than 22 million ounces in PGM reserves, 80% of it palladium at its Montana properties.
Between them Russia and South Africa control 83% of world palladium and supplies 70% of its platinum.
The labour action in the African nation, now in its 11th week, has meant lost supply of more than half-a-million ounces so far. Even if the strike should end today, it would take many months for production to start back up.
Supplies from Russia have also been cast in doubt as the country may use its PGM dominance as leverage in its stand-off with Europe over Ukraine. Europe's auto manufacturers are the top consumers of PGMs used to clean vehicle emissions.
Ample stockpiles have kept the price action in platinum relatively subdued, but palladium has rallied.
Palladium futures trading on the Nymex in New York rose to $811 an ounce on Monday, the highest since August 2011 and up nearly 12% since the start of the year.
Platinum continued to underperform its sister metal however and July delivery contracts were up moderately at $1,467 an ounce. Platinum is up 6.6% in 2014, but still down compared to this time last year.