Platinum demand down by 38% in Q1
Platinum Quarterly considers platinum supply and demand developments for the first quarter of 2020 and provides an updated outlook for 2020. The Platinum Quarterly report and data is prepared independently for WPIC by Metals Focus. “We also provide WPIC’s views on issues and trends relevant to investors considering exposure to platinum as an investment asset, plus an update on how our product partnerships continue to meet investors’ needs” said WPIC.
The impacts of the Covid-19 pandemic on global economies and markets continue to unfold. These impacts on the platinum market in 2020 are expected to reduce both demand and supply, but – due to dynamics peculiar to platinum and unrelated to the pandemic-the overall negative effects are far less than might be expected.
However, forecasts of platinum supply and demand are likely to remain volatile for several months, particularly until Europe, North America and South Africa contain the spread of Covid-19 and the impact of the wide range of economic effects of the pandemic on platinum can be evaluated more accurately.
By gazing Platinum supply and demand-2020 WPIC report says, in 2020 total platinum supply is expected to be 7,197 koz, 10% (-836 koz) lower than the average of the past 5 years, with total platinum demand at 6,950 koz, down 13% (-1,034 koz) on the same basis. Consequently, the surplus expected for 2020 is 247 koz compared to the prior estimate of 119 koz.
The revised forecast of total platinum supply in 2020 of 7,197 koz is 13% (-1,065 koz) lower than in 2019 and reflects a 13% (-810 koz) decline in refined production and a 12% (-255 koz) decline in recycling supply.
Total platinum demand in 2020 is forecast to be 6,950 koz, 18% (-1,480 koz) lower than in 2019 due to lower demand from all four demand segments: automotive (-413 koz), jewellery (-315 koz), industrial (-104 koz) and investment (-647 koz). Despite forecast total investment demand in 2020 being 51% lower than in 2019, bar and coin demand is expected to be up 115% at 605 koz due to the (mainly retail) flight to hard assets associated with significantly increased global risk.
Overall, Q1 2020 was in surplus of 124 koz with total supply down 6% and total demand down 38%! Supply in the first quarter of 2020 was 6% lower than in 2019 as the effects of the Anglo American Platinum converter plant outage and the mining shutdown in South Africa to prevent the spread of COVID-19 both occurred in the last month of the quarter.
Refined metal released from process inventory (locked up in 2019) replaced some of the lost refined platinum production. Similarly, reduced platinum recycling, as a result of pandemic related logistics interruptions, were offset by the recycling of material backlogged at refiners in 2019.
