Platinum supply remained lower by 8% in Q3
Recently World Platinum Investment Council (WPIC) released their edition of Platinum Quarterly for Q3 and also released key data. According to the revealed key data from the study of Platinum Quarterly considers platinum supply and demand developments for the third quarter of 2019.
WPIC provides an updated outlook for 2019 and presents a forecast for 2020. WPIC said, “We also provide our views on issues and trends relevant to investors considering exposure to platinum as an investment asset and an update on how our product partnerships continue to meet investors’ needs.”
Platinum supply and demand in Q3’19 was near balance with total supply down 8% and total demand up 7%. The typical seasonal large surplus expected in the third quarter of each year fell to a small surplus of 25 koz in Q3’19.
This was due to the year-on-year fall in mining supply of 11% that more than offset the 2% rise in recycle supply, and a 7% rise in total demand. The supply fall was primarily due to smelter maintenance in South Africa and demand was up due to continued strong investment demand in the quarter.
The platinum market is forecast to be in balance for this year as the updated 2019 forecast now reflects a deficit of 30 koz compared to the prior estimate of a surplus of 345 koz. The substantial 12% increase in total demand is driven by record ETF buying, which more than offsets expected demand decreases in the automotive (-5%), jewellery (-6%) and industrial (-1%) segments and total supply growth of 2% for full-year 2019.
Mining supply is up 1% as some mining projects ramp up, although this is mostly due to the refining of metal built up in the processing pipeline in 2018. Significant increases in the price of palladium and rhodium helped lift platinum recycling 3% but the low platinum price for most of 2019 led to lower jewellery recycling.
The initial forecast for 2020 projects a market surplus of 670 koz, reflecting a 1% decrease in supply and a 10% decrease in demand, predominantly due to lower investment demand that, although forecast to be well above the five year average, is not expected to include a repeat of this year’s record ETF buying. Mine supply is expected to be 2% lower than in 2018.
“We hope you find this quarter’s report supportive to your efforts to assess and better understand the platinum market, and ultimately make better informed investment decisions. As always, we welcome your thoughts regarding additional insights and research that the WPIC can instigate in the coming months” said WPIC.
