India platinum demand to rise 25% in 2015

In the quarterly analysis of London-based World Platinum Investment Council (WPIC), platinum demand is likely to rise 25 per cent in 2015. The demand for platinum is likely to rise at 125,000 ounce (oz) in 2015, compared with 100,000 oz in 2014. 

Platinum demand in India is likely to rise 25 per cent in 2015 on the back of growing consumer’s interest in bridal jewellery and other innovative collections. There has been a growing focus on emission norms in India. With this, there is a great upside in platinum use as a catalyst in diesel cars going forward. We estimate India’s platinum demand from automotive sector to rise to 165,000 oz in a couple of years, said Paul Wilson, CEO, WPIC.

Platinum demand is steadily rising in India with the introduction of innovative designs of jewellery and wedding sets. The Gem & Jewellery Export Promotion Council (GJEPC) estimates India’s platinum import during April-October 2014 at US$11.99 million against US$6.81 million imported in the year-ago period. WPIC in its analysis reported a 50 per cent decline in above-the-ground stocks to 2.56 million oz in 2014 from 4.14 million oz in 2012. Also, the global platinum market is expected to remain in a deficit with 885,000 oz for 2014 – 27 per cent more than the shortfall of 695,000 oz in 2013.

Meanwhile, reduced supply owing to unprecedented closure of South African mines is likely to keep platinum prices up next year. Data compiled by Kitco.com showed average platinum price at US$1,208.85 an oz in November, a sharp decline from US$1,259.78 in October and US$1,362.36 an oz in September. In August, however, average platinum price was hovering at US$1,492.65 an oz.

One of our key objectives is to introduce greater transparency to the market. Today’s report shows the fundamentals of the industry have become tighter. Demand has exceeded supply in each of the last three years. As a result, above-ground stocks have declined significantly. The markedly different profile in the 2014 third quarter analysis highlights the value of more frequent scrutiny of actual performance, and reflects seasonality as well as some investment outflows, said Wilson.

Total global supply of platinum is expected to be 7.1 million oz in 2014, nine per cent lower than the previous year owing to disruption on unprecedented South African mining strike. Total global annual supply from mining is expected to be 13 per cent below 2013 levels by year-end 2014, largely attributable to the five-month mining strike in South Africa. Global platinum supply from recycling in 2014 is estimated to be two per cent higher or 40,000 oz more than in 2013.

Global platinum demand is expected to be six per cent lower this year at eight million oz, as a decline in investment demand offsets growth in automotive and jewellery demand. The two largest sources of demand are both forecast to grow in 2014. In 2014, demand from the automotive industry is expected to expand by five per cent or 145,000 oz, as platinum is already benefiting from Euro VI-compliant vehicles being manufactured.

Global jewellery demand in 2014 is expected to continue to grow, with an additional 115,000 oz of demand forecast – an increase of four per cent. Overall purchasing in China remains robust and platinum continues to make important inroads into the newer, Indian market.

Courtesy: Business Standard