The World Platinum Investment Council/SFA Releases Latest Platinum Quarterly Report

The World Platinum Investment Council/SFA released its latest Platinum Quarterly report with its forecast for a platinum market that is essentially in balance for calendar 2018, at a surplus of only 25,000 ounces. In 2017, the WPIC estimated a much larger 250,000 ounce surplus for platinum resulting primarily from a sizable drop in the demand for investment products (-51.4%), small bars and coins, and certain industrial applications, particularly in the petroleum (-53.5%) and glass (- 12.2%) sectors.

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Total supplies in 2017 rose marginally (+1.2%) on increased production from South Africa (+0.7%) and autocat recycling (+9.4%). For 2018, the WPIC is projecting slightly different market conditions with a 1.8% increase in jewelry consumption mostly from growth in Chinese offtake, a turnaround in industrial demand in the petroleum sector (+60%) and little change from investment flows leaving total market demand for platinum in 2018 estimated at 7.790 million ounces.

On the supply side, total market supplies are estimated to be at 7.815 million ounces for a 2.5% decrease y/y citing a 3.7% drop in primary South African platinum outturn with limited mine closures offset somewhat by a 4.9% rise in secondary supplies from autocat recycling. The Council did acknowledge the threat to platinum demand from the changing diesel car market in Europe referring to an 8.2% decline in 2017 consumption of the metal used in EU diesel manufacture.

But with rising global vehicle production, a potential for increased platinum substitution for palladium due to the latter’s price appreciation and relative scarcity, and new cleaner diesel performance, further losses in platinum usage in the automotive market should be limited.

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Also in this week’s Platinum Market Review:

-Platinum prices continue under pressure as the selling that began in late-February extends into March

-Palladium prices briefly touched over $1,000 an ounce last week before being met with additional selling

-US jobs data continue strong with ADP private sector hiring up by 235,000 jobs in February, the fourth straight month of 200,000 plus new jobs

-Gold imports into India, as reported by Thomson Reuters GFMS, fell 25%

-Rhodium prices remained rangebound last week with little notable features in the market

Click HERE to read the March 12, 2018 Platinum Market Review

Disclaimer: 

Material contained in this report is based upon publicly available market data believed to be accurate and reliable and is presented for informational purposes only. KMR assumes no warranty or liability for its completeness, nor guarantees future market performance. Further, KMR assumes no liability for direct or indirect loss or damage from the use of information contained in this report, or from any unforeseen errors or omissions.

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About the author

Patrick Magilligan

PGM sales veteran Pat Magilligan is the Director of PGM Marketing at Key Metal Refining LLC. Magilligan has over three decades of experience in commodities trading, sales, and research, working with the likes of Merrill Lynch, Prudential Securities, and A-1 Specialized Services & Supplies Inc.