Platinum Quarterly-second quarter of 2019

New York (Sept 29)  The full-year forecast was revised to 345000 ounces, down slightly from the previous 375000 ounces. The decline in platinum demand in the automotive and jewellery industry was offset by strong growth in investment demand compared with 2018.

Aggregate demand in 2019 is expected to grow by 9 per cent over 2018. In the first half of 2019, the unprecedented investment demand of 855000 ounces (720000 ounces of ETF increments and 135000 ounces of platinum bars and platinum coins) supported our conservative forecast of 905000 ounces of investment demand in 2019. This largely offset the expected decline in demand in the auto industry by 4 per cent and jewellery by 5 per cent.

Due to the increase in mineral supply and recovery, the total platinum supply is expected to increase by 4 per cent over 2018. Refining production is expected to grow by 5 per cent as a result of the increase in some mining projects, but mainly due to the one-off release of refined products from the working stock accumulated in 2018. The increase in the amount of platinum recovered from automotive catalysts offset the decline in jewellery recovery due to low platinum prices, driving a 3 per cent increase in recycled supply.

Despite weak demand in the automotive and jewellery industry in the second quarter of 2019, the projected surplus for 2019 will decrease further, rather than increase, as the risks of falling supply and rising demand magnify. South Africa is still likely to see a disruption in mineral supplies this year because of power outages and the risk of strikes currently under way in connection with wage negotiations. After 1 September 2019, nitrogen oxide emissions from all diesel vehicles sold in Europe will not be higher than 168 mg / km, and consumers will be able to confirm diesel vehicle emissions through independent tests, which we believe will likely stimulate increased sales of diesel vehicles in 2019. If there is any evidence this year about the use of platinum in gasoline car catalysts, it will have a profound impact on platinum demand for automotive catalysts and the fundamentals of platinum supply and demand. The sharp increase in investment demand from institutional investors in the first half of 2019 is likely to be medium-and long-term in nature, which will tighten the balance of the market and increase the price response to changes in demand. Recent price increases are likely to continue to stimulate already high investor interest in the second half of 2019.

SMMnews