Impala Platinum Holdings Ltd., the world’s second-biggest producer of the metal, plunged to the lowest in almost 11 years as a slump in prices of the commodity deepened to levels previously seen in 2009.
Impala tumbled as much as 3.3 percent to 57.16 rand, the lowest since July 2004 and was 1.4 percent lower at 58.28 rand by 3:28 p.m. in Johannesburg, where it’s based. Platinum for immediate delivery fell 0.5 percent to $1,075.97 an ounce, extending this year’s decline to 11 percent and the lowest level since March 2009.
Prices for platinum, mainly used in pollution-control devices for cars and for jewelry, is sliding as European auto sales slow and investors cut holdings in exchange-traded funds. Impala’s market value has decreased 84 percent since 2008 to about 37 billion rand ($3 billion) and will next week lose its place among 42 members of the FTSE/JSE Africa Top40 Tradeable Index for the largest companies listed in the city.
Platinum’s drop is “a very big driver” of the stock’s weakness, which will be exacerbated by its exclusion from the FTSE/JSE Top40 index, said Edward Sterck, a BMO Capital Markets analyst in London. “You’ll have index trackers selling out,” he said.