Lower platinum surplus expected in 2019

There will be a platinum surplus will be 10% lower in 2019 compared tot his year, reveals the The World Platinum Investment Council WPIC. The surplus will be approximately 455 koz, the organisation writes in its latest Platinum Quarterly.

The surplus of platinum will be lower next year because of a recent a 1.6% increase in supply and a 2.4% increase in demand. Recycling platinum supply growth will remain at 1% year-on-year in 2019, WPIC reports. This is mostly due to additional autocatalyst supply, which is believed to offset ‘weaker’ jewellery recycling.
Automotive demand is predicted to remain on its downward trajectory but at a ‘slower rate’. Also, the automotive platinum demand forecast for 2019 indicates ‘no significant substitution’ by platinum for palladium in gasoline auto-catalysts.
However, analysts point out that palladium’s price premium is exceeding US$ 300/oz. They therefore argue that automakers will consider a ‘partial switch’ from palladium to platinum. The tech development and certification costs ‘are probably more than overcome by the current palladium price premium over platinum’, analysts observe.
WPIC ceo Paul Wilson comments: ‘This has been a tough year for platinum. But 2019 looks encouraging based on continued demand growth for platinum in industrial and a rebound in investment.’ He is confident that the year ahead will hold promising developments. And he adds: ‘We believe more ETF investors find platinum’s widening price discount to palladium and rhodium interesting.’