Description of the Business
Precious Metal Products Division is organised into five businesses:
Platinum Marketing and Distribution
The business consists of our worldwide platinum marketing and distribution activities. Marketing is headquartered in Royston, UK with support facilities in Philadelphia, USA and Hong Kong. We are the world’s leading distributor of platinum group metals (pgms) and the sole marketing agent for Anglo Platinum, the world’s largest producer of platinum.
Noble Metals
Noble Metals produces a wide range of precious metal and other fabricated products for industrial and medical applications. Johnson Matthey is the market leader in pgm fabricated products for industrial applications. Manufacturing takes place in the UK and USA.
Pgm Refining and Recycling
Our Pgm Refining and Recycling business includes the recovery of pgms from spent catalysts and other secondary materials and refining primary pgms from global mining operations. We have facilities in the UK and USA.
Colour Technologies
Headquartered in the Netherlands, our Colour Technologies business manufactures black obscuration enamels and silver conductive materials for automotive glass. It also makes colours, enamels and decorative precious metal products for other glass applications such as bottles and architectural glass as well as for tableware and other ceramic applications. Manufacturing takes place in the Netherlands, USA and South Korea.
Gold and Silver
Gold and Silver comprises our gold and silver refining and bullion manufacturing operations. The business serves the world’s mining industries and recycles secondary scrap material. Gold and silver refining operations are located in the USA and Canada.
Performance in 2007/08 Precious Metal Products Division’s revenue increased by 23% to £4,688 million, boosted by higher prices for pgms. In sterling terms the average price of platinum rose by 20%. Sales excluding the value of precious metals were 6% up at £307 million with good growth in the division’s manufacturing businesses. Operating profit grew by 20% to £102.1 million. Translated at constant exchange rates, sales excluding precious metals increased by 7% and operating profit grew by 21%.
Platinum Marketing and Distribution The Platinum Marketing and Distribution business achieved strong profit growth in favourable market conditions. Global demand for platinum in volume terms rose by 9% in the calendar year 2007. Demand for platinum in autocatalysts also increased by 9%, with much of the growth generated in Asia. Heavy duty diesel emission control catalysts also contributed additional demand. Off-take from jewellery manufacturers was surprisingly resilient, only slightly down in the face of the rising price of platinum, which encouraged de-stocking and recycling of old jewellery.
The price of platinum was greatly influenced by supply side concerns in 2007/08. The first nine months of the financial year saw a steadily rising price supported by a series of production problems in South Africa. In January 2008, the price began to increase dramatically as power shortages threatened to severely curtail South African platinum production. Platinum peaked at an all time high of $2,276/oz in early March, averaging $1,474/oz for the year. Supplies of platinum declined in 2007/08 due to these production problems in South Africa. The platinum market was therefore in significant supply / demand deficit, adding to the pressure on the price.
The palladium price also reached its peak in March 2008, touching $588/oz. Although South Africa is only the world’s second largest palladium producer, the bullish platinum sentiment arising from production problems spilled over to its sister metal. The average price for the year was $381/oz.
Physical demand for palladium rose by 4% in 2007. Autocatalyst demand increased due to higher gasoline vehicle production outside Europe. However, demand from Chinese jewellery manufacturers fell after pipeline filling in previous years. Palladium supply was higher than in 2006 due to an increase in Russian sales, increasing the substantial surplus of supply over demand.
The price of rhodium rose sharply in 2007/08, touching a peak of $9,425/oz in March 2008. The average price increased significantly for a third successive year to reach $6,753/oz. Steady demand from the automotive and glass fabrication industries left little metal to be offered in the spot market. Supply showed a slight increase as South African producers sold more metal from refined rhodium stocks, but this was insufficient to eliminate a supply / demand deficit and relieve pressure on a market which was already illiquid.
After the dramatic rise last year, the price of ruthenium declined steadily in 2007/08 as demand from the electronics industry for hard disk memory storage was met by adequate supply and expanded recycling capacity.
back to top Noble Metals Johnson Matthey’s Noble Metals business had a very good year. Our operations in the UK and USA both enjoyed good demand for high quality wires and fabricated products. Sales of catalyst gauzes for nitric acid production also grew. Sales to the medical industry from our three sites in California were slightly down as customers experienced lower demand. The market for catalysts used in the abatement of nitrous oxide, a powerful greenhouse gas produced as a by product in the manufacture of nitric acid, has continued to develop. Early sales have been made and we have developed a strong position in this market which should generate good revenue growth in the future.
Pgm Refining and Recycling Our Pgm Refining and Recycling business had another good year assisted by higher pgm prices and increased intakes of secondary material, especially autocatalyst scrap. Due to process improvements and better utilisation of global refining capacities the business delivered further reductions in the amount of pgms held in the refining circuit. The business continues to work closely with key customers to develop processes and refining services that will support them in being successful in their markets.
Colour Technologies Colour Technologies achieved further good growth in 2007/08. The business maintained its reputation for innovation by commercialising several new products during the year. These included some highly chemically resistant obscuration enamels for the automotive industry and a range of environmentally friendly decorative enamels and porcelain colours. New products for the fire retardant and photovoltaic markets also achieved initial sales and these are expected to continue to grow strongly in the near future.
Gold and Silver On 4th May 2007 we sold our small Hong Kong gold refinery to Metalor Technologies. The group’s remaining gold and silver refining operations are now located in Salt Lake City, USA and Brampton, Canada. These operations had a good year, benefiting from the high gold and silver prices which stimulated good flows of primary and secondary materials.
