JOHANNESBURG (miningweekly.com) – The platinum market’s forecast surplus in 2012 was likely to result in the prices remaining steady between $1 450/oz and $1 750/oz – averaging at $1 600/oz – during the next six months, said platinum researcher Johnson Matthey on Monday.
In its latest ‘Platinum 2012’ report, Johnson Matthey found that, while platinum demand increased 2% during 2011 to 8.1-million ounces, global supplies of platinum rose 7% to 8.53-million ounces, including in-process and refined inventories from South Africa in the second half and recycling, which pushed the industry into a 430 000-ounce oversupply.
Despite underlying platinum production loss of about 120 000 oz in South Africa, supplies from inventories attributed a 5% increase to 4.86-million ounces in total shipments from the country.
The report indicated that there was an increased possibility of lower supply in 2012, owing to South Africa’s reduced production, as strikes and safety stoppages curtailed output.
“A comparatively low level of inventories in South Africa after the drawdowns of last year means that the industry has less flexibility to supplement platinum supplies with metal from stocks,” it stated.
Johnson Matthey also noted that platinum recycling increased 12% during 2011 to 2.05-million ounces, driven by autocatalyst platinum recovery of 1.23-million ounces, up from 140 000 oz, as well as platinum jewellery recycling, which rose 10% to 810 000 oz.
Further, the ‘Platinum 2012’ report stated that on the back of economic recovery in developed markets and the rapid growth in emerging markets, demand for platinum in industrial applications increased to 2.05-million ounces – a 17% jump.
Meanwhile, demand for platinum from China- and India-based jewellery manufacturers increased to 2.48-million ounces in 2011. China experienced a 2% increase to 1.68-million, while demand for platinum jewellery in India jumped by up to a third to 80 000 oz.
Physical investment demand for platinum remained positive, the company stated in the report, but dropped 30% lower than in 2010 to 460 000 oz.
Precious metals consultancy Thomson Reuters GFMS, which is also forecasting a platinum surplus for 2012, recently forecast a platinum price of between $1 475/oz and $1 775/oz for 2012.
Platinum traded at $1 450/oz at the time of writing.
Meanwhile, Johnson Matthey forecast a palladium deficit during 2012, with prices reaching between $620/oz and $800/oz – or an average of $715 – in the next six months.
This is higher than GFMS’s palladium forecast range of $575/oz to $775/oz through to the end of this year.
The palladium market experience a 1.26-million ounce surplus in 2011, with supplies of palladium remaining almost flat at 7.36-million ounces during the year. Gross demand for palladium fell by 13% last year to 8.45-million ounces.