FY2016 Platinum Market Deficit Forecast Revised Upward
LONDON, September 8, 2016
The World Platinum Investment Council (WPIC) today announces the publication of its latest Platinum Quarterly – the first independent, freely-available, quarterly analysis of the global platinum market. The report incorporates analysis of platinum supply and demand during the second quarter of 2016, which is accompanied by a forecast for the full year 2016. Today’s report shows that the deficit for the full year 2016 will now be higher than the previous forecast at the end of Q1 2016.
Platinum Quarterly is a WPIC publication. It is largely based upon research and detailed analysis commissioned with, and conducted by, SFA (Oxford), an independent authority on the platinum group metals market.
SFA (Oxford)’s revised supply and demand forecast increases the full-year 2016 deficit by 65 koz, to a predicted deficit of 520 koz from the 455 koz forecast at the end of the first quarter:
– The report shows that while total demand for the full year 2016 will marginally increase, total mining supply will fall by 3 per cent.
– Weaker than predicted total supply for the full year 2016 comes as the recycling growth forecast is lowered to 2 per cent in 2016.
– Automotive demand is expected to be largely static – down 15 koz on 2015 – as is jewellery demand – up 5 koz on 2015 – buoyed by growth in India, the US and Western Europe offsetting declines in China and Japan.
– Industrial demand for the full year 2016 is expected to dip by 2 per cent year-on-year because of lower requirements from the petroleum, electrical and glass sectors.
– Total investment demand is forecast at 350 koz, up 45 koz, as bar and coin demand remains strong and after ETF net sales tapered in the first half of the year.
– In light of the revised forecast for 2016 the key Above Ground Stocks measure is predicted to reduce to 1,875 koz – down 55 per cent from 4,140 koz at the end of 2012.
For the second quarter of 2016, today’s report shows a rebound in supply and a fall in demand:
– Total mine supply in Q2 increased by 22 per cent from the previous quarter, as production from South Africa returned to more normal levels as refining resumed after the safety related refinery stoppage in Q1.
– Jewellery demand in Q2 increased by 3 per cent from the previous quarter, largely due to growth in Chinese and European fabricator demand.
– Retail sales of jewellery in India remain strong, with demand increasing 25 per cent year-on-year in Q2.
– Industrial demand grew by 3 per cent in the quarter, while total automotive demand in the quarter remained virtually unchanged.
– Investment demand remained strong despite the fall quarter-on-quarter as the record platinum bar and coin buying witnessed in recent quarters eased, while the decline in ETF holdings tapered further.
Paul Wilson, chief executive officer of WPIC commented:
“When the World Platinum Investment Council was launched in 2014 it was one of our primary aims to shine a light on the fundamental workings of the market. I hope today’s report shows the value of our work because the data and analysis provides far greater insight than previously possible into a particularly complex quarter.
The overall picture for platinum in 2016, which has enjoyed a significant rebound in price over the course of the first half of the year, continues to be one of constraint and ultimately deficit in 2016 – a deficit greater than forecast in the previous quarter.