Anglo Platinum share price hit by weak production update

Key Takeaways:

1. Decrease in Total PGMs Production
2. Decline in Own-Managed Mines' Production
3. Significant Decrease in Joint Operations PGM Production
4. Increase in Purchase of PGM Concentrate from Third Parties

Anglo American Platinum (AMS) has recently reported its production performance for the fourth quarter of 2023.

Decrease in Total PGMs Production

Anglo American Platinum saw a 6% decrease in total Platinum Group Metals (PGMs) production in the fourth quarter of 2023, amounting to 932,200 ounces. The total production for the year reached 3,806,100 ounces.

Own-Managed Mines' Production Decline

The decrease in total PGMs production was primarily attributed to a 3% reduction in their own-managed mines' PGMs production, which fell to 543,500 ounces. This decline was mainly due to lower production at Amandelbult due to planned infrastructure closures and challenging ground conditions at Dishaba Mine.

Mitigation through Increased Output

The decline in own-managed mines' production was partially mitigated by increased output from the Unki and Mogalakwena mines.

Significant Decrease in Joint Operations PGM Production

Joint Operations PGM production experienced a more significant decrease of 47% to 104,400 ounces. This was largely due to the divestment of the company's 50% interest in Kroondal, which transitioned to being reported as a third-party purchase of concentrate (POC) arrangement.

Increase in Purchase of PGM Concentrate from Third Parties

Anglo American Platinum witnessed a 21% increase in the purchase of PGM concentrate from third parties, totaling 284,300 ounces. This rise was influenced by the integration of Kroondal production as a 100% third-party POC from November 2023.

Anglo Platinum – technical view

The short to medium term trend for Anglo Platinum remains down. The price is currently testing support at 708.50. A close below this level (should it occur) would suggest a downside breakout, with 640.80 the next level of support considered. Traders who find short entry into such a move, might consider using a close above a one day high as a trailing stop loss indication.

The stochastic is labouring in oversold territory, while this is a contrary indication, the downtrend is considered to carry prevalence. The downtrend is currently being supported by rising volume which currently suggests some sustainability to the move lower.

A long bias to trades on Anglo Platinum might only be preferred if we do instead see the share clawing back losses and managing to break (close) back above the red trend line on the chart above.