May 17, 2017 12:30:22 PM
SEATTLE (Scrap Monster): The quarterly review report published by the World Platinum Investment Council (WPIC) suggests decline in total platinum supply during the first quarter of 2017. The lower decline in demand resulted in market deficit. The WPIC Quarterly Report also forecasts demand to see sharp decline by 6% in 2017.
According to WPIC, the platinum supply totaled 1,750 koz during the initial three-month period of the current year. The supply dropped by 4% over the previous year. The refined production surged higher by 10% to 1,390 koz in Q1 ’17. South Africa reported 19% growth in refined output during the quarter. On the other hand, refined production from Zimbabwe reported 19% decline. Meantime, output from North America and Russia remained stable. The secondary supply reported growth of 25 koz, which was more than offset by 90 koz decline in primary supply. The recovery of platinum from spent autocatalysts remained flat. Recovery from jewellery recycling grew 4%, the report noted.
The overall global demand declined marginally by 1% to total 2,050 koz. The 75 koz decline in investment demand more than offset the gains in other sectors. Investment demand totaled 80 koz, with gains in bars, coins and ETF demand being offset by modest decline in exchange stocks. Bar and coin demand, mainly driven by coin purchases, totaled 25 koz. Platinum ETF holdings across the world grew by 65 koz. Incidentally, automotive and jewellery sectors reported gains of +20 koz each. A gain of 10 koz was reported by industrial sector. Automotive platinum demand totaled 895 koz in the first quarter of 2017. Jewellery sector gains were in line with 3% rise in global jewellery demand. The net demand for platinum from industrial sector totaled 455 koz in Q1 ’17, marginally higher by 2% over Q1 ’16.
During 2017, total platinum supply is projected to decline by 2% year-on-year to 7,730 koz. Both primary and secondary supplies are expected to drop during the year. Refined platinum production may report lower figures close to 5,960 koz in 2017. Global refined supply may see marginal 1% decline to total 5,960 koz in 2017. The production increases in North American and Russia are likely to be offset by declines in South Africa and Zimbabwe. The Zimbabwean production is forecast to witness 10% decline. The secondary supply is forecast to decline sharply by 6%. The 2% increase in platinum recovery from autocatalysts will be completely offset by 20% decline in supply from jewellery recycling. The WPIC projects recovery volumes from spent autocatalysts and scrap jewellery at 1,255 koz and 500 koz respectively.
The automotive platinum demand is projected to record slight decline to 3,405 koz in 2017. Anticipated drop in demand in China and Japan may eventually lead to 1% decline in global platinum jewellery demand. The jewellery demand is forecast to total 2,530 koz. Also, industrial platinum demand will decline by 9% over the previous year to 1,610 koz. The full year investment demand for platinum is projected at 250 koz.
The decline in global demand is projected to outclass the decline in global supply. Consequently, the market deficit is expected to narrow from 360 koz to 65 koz during the year.