The global platinum market will end the year in a surplus of 295 000 ounces as both supply, from main producers Zimbabwe, South Africa and Russia, and demand for the metal will fall by 2 percent, the World Platinum Investment Council (WPIC) said yesterday.
Global demand, which will fall to 7,615 koz, is expected to remain low due to lower production of diesel vehicles in Europe which will cut platinum use by vehicle manufacturers by six percent.
Koz is equal to a thousand platinum ounces.
Platinum is used by vehicle manufacturers in catalytic converters which reduce gas emissions. The WPIC noted that platinum supply would decline to 7,910 koz.
“Most mining regions are expected to have lower refined production in 2018 with declines being seen in South Africa (-50 koz), Zimbabwe (-20 koz), Russia (-40 koz) and other regions (-5 koz), while North American output remains flat,” the WPIC, which is funded by platinum producers said in its latest quarterly report.
“With both supply and demand dipping by 2 percent this year, the market is projected to have a surplus of 295 koz.”
According to the WPIC, South African mine supply could decrease by 1 percent to 4 335 koz, due to closure of loss-making production areas during 2017.
Mine supply from Zimbabwe is estimated to decrease by four percent year-on-year, with mine production stable at 460 koz, the WPIC said.
“No major pipeline stock movements (from Zimbabwe is) expected,” said WPIC.
“Supply from North America should remain stable at 365 koz, while output from Russia is projected to fall by six percent year-on-year to 680 koz as a small pipeline lock-up is anticipated.”
This, the WPIC said, would give a total mining output of 6 015 koz for the year. — New Ziana.