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Record quarterly deficit for platinum

Platinum demand in quarter one significantly exceeded the ‘strong’ mine supply during the same period, according to the World Platinum Investment Council.

The council attributed this to the release of refined platinum from smelter stock built up in 2018. ‘The result is the largest quarterly deficit, of 550 koz, since the WPIC commenced publication in 2014.’

Total global demand for platinum is expected to increase by 8% in 2019 on the back of a strong increase in investment. Supply is expected to rise by 4% this year although the council warns that potential power disruptions and industrial action could materially reduce South African mining.

The industry saw a 7% growth in the recycling of autocats, while recycling from platinum jewellery was down 9% and industrial platinum scrap remained at the same level.

With demand projected to increase more than supply, the annual 2019 market balance is expected to narrow sharply to a surplus of 375 koz from the previously forecast surplus of 680 koz.

Automotive demand was down year-on-year during Q1 but analysts say that the rate of decline is easing because car manufacturers want to avoid heavy fines issued by the EU for not meeting strict CO2 reduction targets.

Meanwhile, Q1 industrial demand for platinum was down slightly compared to last year. This is because growth in demand for platinum in chemical catalysts was offset by declines in the glass manufacturing and other industrial segments.

The quarterly jewellery demand fell further year-on-year due to a continuing drop in Chinese demand, although that was mitigated by a rise in all other regions.

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