Iridium alloy tipped spark plugs are used in applications ranging from aerospace to today’s cars

Precious Metals Division achieved operating profits of £45.4 million, 22% ahead of last year. The division encompasses Johnson Matthey’s platinum marketing, trading and manufacturing businesses together with its global gold and silver refining and bullion product manufacturing operations.

The excellent performance was driven by very strong demand for the platinum group metals and related products.The gold and silver operations achieved good growth in refining volumes but profits were flat on prior year.

Platinum
It was a remarkable year for the platinum group metals with record demand for both platinum and palladium coinciding with a further period of erratic Russian supplies caused by legal and administrative obstacles. Metal prices rose sharply as supply side deficits increased, although these were partially alleviated by the sales from the US National Defence stockpile. Platinum reached an 11 year high of $573 per ounce on 17th February 2000 and palladium attained an all-time record $800 per ounce on 21st February 2000.

The year saw a surge in demand for platinum jewellery in China driven by growing enthusiasm for platinum among young consumers

Record jewellery and industrial demand were the key features of the platinum market during the year. The highlight of the jewellery sector was the surge in demand from manufacturers in China, which was up by over 50% on 1998/99 at almost a million ounces.This was driven by growing enthusiasm for platinum jewellery among young consumers coupled with a significant expansion of manufacturing facilities in China. A global trend to white metal has also boosted platinum jewellery sales worldwide.

Palladium demand reached record levels despite the rising price. Most of the growth occurred in the autocatalyst sector driven by tighter emission standards in Europe and North America, and some stockbuilding by the car companies against the growing use of palladium catalysts by the industry and uncertainty over Russian supplies.The year saw continued growth in demand from other catalytic applications, particularly in the chemical industry but there was a modest decline in demand from the electronics and dental sectors due to substitution.

Platinum’s marketing operations benefited from the sales and trading opportunities provided by buoyant markets and volatile prices.The average price of platinum in 1999/2000 was $409 (1998/99 $368). Palladium averaged $425 up from $315 in 1998/99.

Platinum’s manufacturing operations continued their good growth trend of recent years. Recovering demand from traditional glass and steel markets was augmented by strong progress in new product sectors, particularly in pgm coatings for a range of high technology, high temperature applications. Good growth was also seen in precision-engineered parts for the medical sector.

Johnson Matthey's small gold bars are used by jewellery manufacturers around the world

Gold and Silver
Johnson Matthey’s Gold and Silver business is the market leader in the refining of gold and silver and the supply of bullion products. Its operations are located in Salt Lake City (USA), Brampton (Canada), Royston (UK), Hong Kong and Melbourne (Australia).

1999/2000 was a satisfactory year for Gold and Silver; the global business managed to maintain its profitability despite pressure on margins due to over capacity in the refining and bullion product markets. Flat global demand and supply liquidity maintained the downward pressure on the gold price which in turn slowed the pace of mine expansion.

There have been encouraging signs of recovery in jewellery and investment demand in the first quarter 2000 which, together with good growth in non-refining related business, provides Gold and Silver with a promising outlook for 2000/01.

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