High-Flying Platinum Stocks Set to Extend Johannesburg Gains

The blistering pace of gains that has pushed South African platinum stocks to the highest in more than 12 years looks likely to be sustained as an upswing in demand and supply constraints fuel the rally.

Johannesburg’s index of platinum stocks has soared 30% this year, leaving the other sectors in the local equities benchmark trailing in their wake. Over 12 months, the FTSE/JSE Africa Platinum Mining Index is up an eye-watering 230% as of Tuesday’s close, thanks to surging prices for palladium and rhodium, dug up with platinum and used in vehicle pollution-control devices.

Disruptions at No. 1 global palladium miner MMC Norilsk Nickel PJSC have added to worries over production of platinum group metals. Last year, the platinum market experienced its biggest annual supply deficit on record. Palladium rallied the most since January on Tuesday after Norilsk Nickel said it will take at least three to four months to fully reopen two Arctic mines affected by flooding.