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World platinum demand well above supply

One of South Africa’s
larger platinum producers
– Anglo Platinum’s
Potgietersrus platinum
Johannesburg, South Africa — MININGREVIEW.COM — 21 May 2008 – The world platinum industry experienced a year of intensified activity in 2007 with international platinum demand rising substantially to almost half a million ounces above global supply of the metal. The platinum market moved from a surplus of 355 000 ounces in 2006 back into a deficit of 480 000 ounces in 2007.
Johnson Matthey – a world leader in advanced materials technology – said in its newly released Platinum 2008 report that global platinum demand had risen by almost 9% to a record 7.03 million ounces last year, despite record high prices driven by strong growth in the auto-catalyst sector. Platinum purchases by this sector had jumped 8.2 percent to a global total of 4.23 million ounces in 2007. Demand picked up in Europe, Japan and China, where purchases climbed 38.7% to 215 000 ounces last year.

Net investment demand for investment products rose to 170 000 ounces in 2007 in sharp contrast to the net disinvestments in 2006, aided by the launch of two new exchange-traded funds. Jewellery demand, however, was affected by high prices. Global demand for new metal in the jewellery industry dropped more than 3% to 1.59 million ounces.

The Johnson Matthey report went on to point out that global platinum supplies had fallen by 4.1% to 6.55 million ounces in 2007, mainly due to supply disruptions from main producer, South Africa. Sales from Russia and North America had also decreased.

Turning to palladium, the report revealed that global demand for palladium had increased 3.5% in 2007 to 6.84 million ounces, as cheaper prices encouraged auto makers to use the metal in their catalytic converters. Demand was forecast to rise further in 2008.

Global palladium supply jumped 8% to 8.59 million ounces in 2007. “Although palladium is once again in substantial surplus in 2007, it appears that much of the excess is absorbed by a small number of investors and institutions,” the report concluded.