Mumbai: The World Platinum Investment Council (WPIC) has announced the publication of its latest Platinum Quarterly – the first independent, freely-available, quarterly analysis of the global platinum market. This report incorporates analysis of platinum supply and demand during the first quarter of 2017, during which time total mine supply hit 1,330 koz, down 6.3% year-on-year and the lowest since Q3 2014.
The report says that overall platinum supply is projected to fall by 2% year-on-year to 7,330 koz in 2017, with both primary and secondary supply expected to decline.
Recycling is projected to fall by 6% year-on-year to 1,760 koz in 2017. Secondary supply from jewellery recycling is projected to decline by 20% year-on-year with recycling trends normalising following unusually large stock flows in China last year.
Automotive demand for 2016 and 2017 is revised upward by 45 koz. The revisions reflect higher than expected global vehicle sales with increased loadings, while greater scrutiny of emissions is also believed to be limiting moves to thrift platinum loadings.
Global platinum ETF holdings grew by 65 koz in the first quarter, with increases observed across most regions. ETF assets in the quarter were at their highest level since the fourth quarter of 2015. Bar and coin demand during the first three months of 2017 was supported by the minting of 20,000 one-ounce US American Eagle bullion coins in January, all of which were sold in just three days. Overall platinum investment demand is now projected to be 250 koz this year.
Global platinum jewellery demand for the quarter increased 3% year-on-year, buoyed by increased Chinese retail sales during the quarter. However, global jewellery demand for 2017 is forecast to slip 1% from 2016, with anticipated declines in China and Japan outweighing gains in India and other regions.
The platinum market is expected to be broadly balanced over the year, with a deficit of 65 koz in 2017 predicted. Above Ground Stocks are expected to end the year at 1,885 koz, a 3% fall on 2016, but more than 54% down from 2012.
Paul Wilson, chief executive officer of WPIC commented: “This quarter’s report reinforces our long held view that supply will become increasingly constrained in 2017, while revisions to the data show that 2016 was more heavily in deficit than previously detailed. Today’s analysis once again shows how robust demand for platinum from the automotive sector continues to confound many negative expectations in the market. We believe that the upward revisions of automotive platinum demand in 2016 and 2017, contained in the report, indicate that automakers are increasing platinum loadings on vehicles in the face of increased scrutiny of emissions levels.
The launch of the recent C40 independent road-testing initiative, led by the Mayors of London and Paris, sent the strongest of messages to carmakers that they need to act quickly to clean up the most polluting elements of their fleets or face the consequences. We believe that platinum will be an integral part of the solution that the carmakers turn to in 2017 and beyond.”