Platinum demand down 7% YoY in 2017
Global demand projected to grow marginally!
World Platinum Investment Council (WPIC) released their report for 2017 & Q4. according to the report, total platinum supply expanded by 1% to 8,015 koz in 2017 as mining production improved 1% year-on-year to 6,110 koz and recycling increased by 3% to 1,905 koz. A 3% rise in refined production to 4,370 koz (+115 koz) in South Africa outweighed lower output from Zimbabwe (-45 koz) and North America (-30 koz).
Secondary supply improved 3% since, despite jewellery recycling falling 10% to 560 koz following a strong 2016, auto catalyst recycling grew by 9% to 1,340 koz. Global demand was 7,765 koz in 2017, down 7% year-on-year from 8,320 koz, as all the major segments experienced lower demand.
Automotive demand fell 3% to 3,395 koz, driven by declining usage in Western Europe, while global jewellery demand slipped 2% to 2,460 koz as the contraction in the Chinese market was only partially offset by gains in other regions. Industrial demand was 8% lower year-on-year at 1,650 koz, mostly owing to lower net petroleum demand.
Investment demand was also substantially lower in 2017 at 260 koz, mostly owing to a reduced level of platinum bar purchases in the largest market, Japan. This resulted in the platinum market being in a surplus of 250 koz in 2017. The shift in the market balance from the 15 koz deficit forecast in Platinum Quarterly Q3 2017 was caused by a number of factors.
Supply from South Africa was significantly higher than predicted where, despite some mine closures, other operations outperformed expectations. The fourth quarter also saw a jump in recycling volumes which further added to the increase in total platinum supply. In addition, new information on jewellery demand in India resulted in demand there being rebased to a lower level.
“In 2018, global demand is projected to grow marginally to 7,790 koz, as a recovery in industrial demand and an increase in jewellery demand outweigh declines in automotive and investment demand. Global platinum supply is forecast to be 7,815 koz this year, a contraction of 2% from 2017, despite an anticipated increase in recycling of 60 koz to 1,965 koz.
Looking at the performance of Platinum in 4Q 2017, the report says, global demand increased 13% quarter-on-quarter to 2,040 koz in Q4’17 despite a dip in industrial usage (-10 koz), as automotive (+55 koz), and jewellery (+90 koz) demand both improved from the previous quarter.
Investment demand rebounded after a decline in Q3’17 as investors returned to buying ETFs and bar and coin demand also increased. Total supply increased by 2% (+50 koz) quarter-on-quarter as total mining supply was boosted by a decrease in producer inventory in South Africa and recycling increased as high PGM prices incentivised a strong flow of material to autocatalysts recyclers. With supply and demand closely aligned, the
market was essentially balanced (+50 koz).
