HomeInternationalPlatinum market moves into surplus

Platinum market moves into surplus

Mimosa “’ one of the
Zimbabwean platinum
mines which increased
production by 28% last
London, England — MININGREVIEW.COM — 18 May 2010 – The global platinum market moved from a deficit of 220 000 ounces in 2008 into a surplus of 285 000 ounces in 2009.

Revealing this in its “Platinum 2010” report released here, Johnson Matthey confirmed that demand for platinum net of recycling had fallen by 8.5%to 5.635 million ounces last year, while supplies of platinum from current mining operations had dropped by 0.3%to 5.92 million ounces.

The report added that South African supplies of platinum had risen by 0.3% to 4.53 million ounces, with increased output from newer mines and the sale of metal from stocks accumulated in 2008 offsetting losses from the closing of some uneconomic production. North American supplies, hit by industrial action, had dropped to 260 000 ounces and Russian supplies had fallen slightly to 785 000 ounces. Expansion at Zimbabwe platinum mines had led to output increasing by 27.8% to 230 000 ounces.

It went on to say that gross demand for platinum in auto-catalysts had dropped by 39.0% to 2.23 million ounces in 2009 as global vehicle production had fallen heavily in nearly all regions. The economic downturn had hit industrial demand for platinum in almost all applications as industrial plants had operated well below capacity, product inventories had been reduced and capital investment had been delayed.

Gross purchases of platinum for jewellery manufacture had climbed by 46.1% in 2009 to 3.01 million ounces worldwide, and identifiable physical investment demand for platinum had increased by 18.9% in 2009 to 660 000 ounces.

Johnson Matthey said it expected the platinum market to be close to balance in 2010 as rising demand outpaced a steadier growth in mine supplies. Concerns remained over global economic recovery and the sustainability of Chinese economic growth, while sovereign debt issues also continued to apply some downward pressure to the platinum price.

The report concluded that if interest rates remained low and the gold price stayed at its current elevated levels, net investment in platinum might well continue to grow and help to sustain the price at between US$1 600 and US$2 000 per ounce during the next six months.