Global – The World Platinum Investment Council (WPIC) has increased its platinum deficit forecast for this year by some 64 000 ounces because it sees ‘little evidence’ to support rising output over the medium term.
‘The predicted strong growth in platinum supply from recycled autocatalysts, argued by some as potentially weakening platinum’s solid fundamentals, has not materialised,’ the WPIC says in its latest quarterly update. ‘While growth in recycling supply is still likely, it remains muted due to the ongoing low scrap steel price and reduced rates of car scrapping.’
The council forecasts that total supply will decrease by 2% to 7.73 million ounces in 2016 and now anticipates a full-year deficit of around 520 000 oz. ‘We are confident that the fundamentals behind platinum remain strong and will be so for the foreseeable future,’ it insists.
The WPIC also points out that platinum output from the world’s largest producer South Africa has failed to reach the levels observed in 2013 and 2015. ‘Real cost increases due to labour costs – which account for over 50% of overall mining costs – continue and, together with low metal prices, they have driven the fall in capital investment across this industry,’ it states. ‘Sustaining current output is harder as a result.’