Platinum market deficit seen shrinking to 235,000 oz in 2015: WPIC
According to a report by the World Platinum Investment Council (WPIC), the platinum market is expected to be in deficit of 235,000 ounces in 2015, down 66 per cent from 2014 levels due to stronger mining and recycling supply growth.
Above-ground stocks of the metal that have prevented prices from benefiting from a tight market are forecast to have decline 20 per cent in 2014 and are expected to drop a further 8 per cent this year. Platinum prices fell 12 per cent in 2014 and are now at their lowest since 2009 around US $1,140 an ounce, despite heading for a fourth straight annual deficit.
Industry-funded WPIC, which commissioned the report from the consultancy SFA (Oxford), estimated above-ground platinum inventories, excluding exchange-traded funds, metal held by exchanges, and industry working inventories, at 2.53 million ounces at the year-end. Mined platinum output from South Africa, the source of three-quarters of mined supply of the metal, is forecast to rise 31 per cent this year. The world’s largest platinum miners, crippled by a five-month stoppage in 2014, are seen ramping up refined production to above 4 million ounces this year.
Overall platinum supply is forecast to rise 10 per cent to 7.965 million ounces this year. Demand is expected to increase by a modest 3 per cent, largely on the back of a drop in investment and lacklustre growth in the two largest sectors – offtake by jewellers, and buying by carmakers, who use the metal in catalytic converters. Platinum investment volumes are seen declining 63 per cent to 50,000 ounces this year, after an 85 per cent drop in 2014.
Autocatalyst demand, chiefly from the makers of diesel-engined vehicles in Europe, is expected to rise by 4 per cent, the WPIC said. The growth in platinum demand from the European automotive sector will be higher in 2015, because there will be more cars and the loadings are higher,” WPIC director of research Trevor Raymond said, referring to tightening European legislation on exhaust emissions.