Platinum market to remain in surplus despite projected rise in demand

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    The World Platinum Investment Council (WPIC) said on Wednesday global platinum demand is expected to increase by 5 percent to 7.7-million ounces this year, owing to a significant increase in investment demand, which should offset weaker demand in the automotive, jewellery and industrial segments.

    In its latest ‘Platinum Quarterly’ report, the council pointed out, however, that supply would also likely increase by 5 percent this year, widening the market surplus, from 645 000 oz in 2018, to 680 000 oz.

    Global refined production is forecast to grow by 6 percent to 6.4-million ounces in 2019. The majority of this supply increase is a one-off boost from work-in-progress pipeline build-ups in 2018.

    Around 90 000 oz of the supply growth will be the result of organic growth.

    Refined production from South Africa will lift temporarily to 4.7-millon ounces, as the country’s mines process work-in-progress stocks.

    Expansion at a mine in the US should lift North American supply by 50 000 oz to 410 000 oz, while output from Zimbabwe and Russia should remain stable at 470 000 oz and 675 000 oz, respectively.

    Recycled platinum supply is expected to rise by 3 percent to 1.9-million ounces this year on the back of an acceleration in European autocatalyst recycling, but with slower growth in the US.

    Meanwhile, the WPIC expects total investment demand this year to reach about 530 000 oz, with strong growth in exchange-traded fund (ETF) holdings, combined with another year of strong bar and coin demand.

    The WPIC expects chemical demand to increase by 35 000 oz, which will offset declines in the glass and other industrial segments. As a result, overall industrial demand will just fall short of 2018’s high, at 1.8-million ounces.

    The decline in jewellery demand should slow, dropping just 1 percent to 2.3-million ounces, owing to an easing of the decline in Chinese demand and growth in other regions.

    Automotive demand is projected to fall at a far slower rate than in 2018, declining 3 percent year-on-year to three-million ounces in 2019, compared with a 7 percent decline in 2018.

    The WPIC said the smaller decline is partly attributable to a stabilisation of demand in light-duty diesel autocatalysts in India.

    All the known pgm resources in the country occur along the 550-kilometre-long Great Dyke of Zimbabwe. Within the Great Dyke, four geological complexes are known to contain pgm and base metal deposits.

    These are namely: Wedza Complex (mined by Mimosa Mining); Selukwe Complex (Unki – Anglo American); Hartley Geological Complex (Zimplats); and Musengezi Complex. Studies suggest a huge resource of several million tonnes of pgm on the Great Dyke.

    The Hartley Geological Complex is the largest of the pgm bearing complexes containing 85 percent of known pgm resources in Zimbabwe.

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