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Reuters survey confirms ‘healthy’ growth in autocatalyst scrap

The platinum price will exceed US$ 1 000/oz in the second half of this year, market analysts believe. Despite a steady increase in autocatalyst recycling and ‘resilient’ mine production, platinum supply remains tempered by a fall in jewellery scrap and retail investments, so reveals the newly released Thomson Reuters GFMS ‘Platinum Group Metals Survey 2018’.

Platinum consumed in the production of autocatalyst applications last year rose by a healthy 7.1% to 3.48 Moz (108.2 t). ‘This was the fourth consecutive rise and saw offtake reach the highest level in a decade,’ the report points out.

‘Unsurprisingly, Europe continued to be the largest consuming region of platinum in autocatalyst applications last year,’ Reuters analysts observe. Platinum demand in the autocatalyst market was 45% in Europe and 13% in North America. The latter witnessed 3% year-on-year growth in 2017, while demand for platinum in the autocatalyst was 10% in both Japan and China.

‘Healthy’ scrap growth

Worldwide, autocatalyst scrap recorded a ‘healthy’ 5% year-on-year rise in 2017, the second in succession, to an estimated 1.2 Moz (36.9 t). ‘Weaker steel prices in recent years had lowered the number of end-of-life vehicles being presented to scrap yards but there were signs of a solid recovery last year following a modest rise in 2016,’ the report states.

The more mature markets were mixed with strong gains in Europe and a slight uptick in North America – partially offset by a slight contraction in Japan. Collection from emerging markets was ‘more impressive’, rising by double digits, led by a 23% increase from China.

Price recovery for platinum?

In terms of prices, platinum was in general regarded as a ‘disappointment’ in 2017. While a recovery was seen in the global industrial sector, as well as a weakening dollar, both were insufficient to prevent platinum recording its lowest annual average in 12 years. This can be partly attributed to a much lower volume of diesel cars put on the market.

Also, global refined platinum mine production fell by 1% to total 5.92 Moz (184.2 t) in 2017 as a result of output losses in South Africa, Zimbabwe and Canada.

‘We expect the platinum price will start a recovery this year, albeit a gradual one,’ comments Thomason Reuters GFMS head Rhona O’Connell. ‘This is predicated on a small deficit this year, of nearly 300 000 oz, fuelled by a contraction in supply – chiefly from the South African mining sector – coupled with rising demand’, she observes.

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