Overall 2020 Platinum demand expected to weaken – WPIC

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  • Refined production from Zimbabwe is expected to decline by 1% from 455 koz in 2019 to 453 koz
  • Overall supply in the second quarter of 2020 fell by 35% year-on-year
  • Both supply and demand for the metal were severely impacted by measures to contain COVID-19 pandemic

Harare – The World Platinum Investment Council (WPIC) announced on Tuesday that total platinum demand in 2020 is forecast to be 7,438 koz, 11% (-948 koz) lower than in 2019.

The decline is due to lower demand from all four demand segments namely; automotive (-464 koz), jewellery (-287 koz), industrial (-5 koz) and investment (-192 koz).

“However, total investment demand in 2020 is now forecast to be 1,060 koz, 15% lower than in 2019 but 455 koz higher than previously forecast for the year,” WPIC said in its latest edition of Platinum Quarterly report (Q2 2020).

“Indeed, heightened global risk is expected to continue to drive investor demand for hard assets, with bar and coin demand forecast to grow by 113% to 600 koz”.

Refined production in 2020 is expected to fall by 15% to 5,167 koz compared to 6,094 koz in 2019. Leading the decline is production from South Africa which is expected to tumble by 20% from 4,402 koz in 2019 to 3,517 koz in 2020.

Refined production from Zimbabwe is expected to decline by 1% from 455 koz in 2019 to 453 koz in the current year. Production from North America is forecasts to grow by 4% while Russia is expected to decline by 9%.

Second quarter production in Zimbabwe declined by 3% to 114 koz from 118 koz recorded in Q1.

In Zimbabwe, platinum mines were able to remain open during the national lockdown implemented from midnight on 30th March. Some mines ceased activities for a period but by the end of the second quarter all platinum operations were back at full capacity.

Overall supply in the second quarter of 2020 fell by 35% year-on-year (-748 koz) to 1,408 koz exacerbated by the impact of the Anglo American Platinum Converter Plant (ACP) outage and South Africa’s COVID-19 driven mining lockdowns.

Meanwhile, demand in the second quarter fell by 19% year-on-year (-387 koz) to 1,599 koz, but was only 2% (-36 koz) down on first quarter levels.

Paul Wilson, CEO of the World Platinum Investment Council commented, “In the second quarter of 2020 the COVID-19 crisis continued to have a profound impact on the platinum market.

“Both supply and demand for the metal were severely impacted by measures to contain the pandemic as well as the associated negative economic impact on economies around the world,” he said.

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