Recycled platinum supply expected to rebound in 2016

Global – Global supply from recycled platinum fell by 15% last year to 1.725 million oz, according to the latest quarterly report released by the World Platinum Investment Council (WPIC). Big influences were the reduced flow of scrap catalysts from collectors as a result of lower platinum group metal prices while depressed steel values served to reduce vehicle scrapping.

‘On the supply side, a forecast of 3% growth in 2016 relies upon a 14% rebound in recycled supply,’ notes the WPIC. ‘Meanwhile, sentiment-driven supply from vaulted investor holdings looks less likely to satisfy market shortfalls than it did over the past four years.’ Automotive demand is predicted to increase by 3% on the back of another year of light vehicle sales growth and higher loadings per vehicle.

Jewellery sales are expected to return to growth of 1% in 2016, boosted by a recovery in China and strong demand growth in India where the Evara Platinum programme continues to expand. As for 2015, the global platinum market ended in deficit by 380 000 oz (compared to 725 000 oz in 2014).

Last year saw a 5% increase in automotive demand to 3.455 million oz from 3.29 million oz in 2014. Automotive demand from India grew 9%, according to the WPIC. It also stresses that, despite the impact of the Volkswagen diesel investigation, demand was up 9% in Western Europe where the imposition of new Euro 6 legislation also increased platinum loading per car.

Jewellery sales contracted by 4% over the year, affected by a fall in Chinese demand. In contrast, demand for platinum in India surged 26% on the back of strong bridal growth and increased sales of men’s jewellery.