HSBC: Platinum likely to average $1,005 an ounce this year

UNITED STATES July 11 2016 12:05 PM

NEW YORK (Scrap Register): HSBC looks for wide supply deficits to underpin prices of platinum group metals. 

“Limited prospects for mine output growth, reduced metal derived from auto recycling, and steady but not stellar auto and industrial demand should assure both PGMs of ongoing structural deficits, this year and next," analysts at HSBC added.

“Mine output gains of 2015 are unlikely to be repeated going forward for platinum as high production costs, restructuring and capex cuts by South African producers should, over time, reduce supply growth.” 

Palladium is mined largely as a by-product of nickel production in Russia and platinum production in South Arica, thus palladium output may be constrained by limited production of these two primary metals.

HSBC looks for platinum to average $1,005 an ounce this year, same as its prior forecast, and for palladium to average $590, down from the prior forecast of $655 an ounce. 

Platinum is still seen averaging $1,195 an ounce next year, although the palladium forecast was trimmed to $690 from $760 an ounce.