JOHANNESBURG (miningweekly.com) – Following seven consecutive years of gross surpluses, the platinum market switched to a narrow deficit in 2012 on the back of extensive disruption to mine supply from South Africa, the latest Thomson Reuters GFMS Platinum & Palladium Survey, released on Thursday, showed.
The consultancy estimated that the platinum market swung to a marginal deficit of 83 000 oz, or 2.6 tonnes, in 2012, which arrested the growth of platinum stocks that had substantially risen since 2004.
This reversal of trend was almost entirely attributable to supply side factors, with refined metal outturn from the three major sources – mining, autocatalyst recycling and the recycling of old jewellery scrap – contracting sharply last year, by 10%, 9% and 19% respectively.
The survey asserted that, of the three, in absolute terms, the withdrawal of supply overwhelmingly originated from the mining industry, where the 10% drop translated to 620 000 oz, or 19.1 tonnes.
This was largely the result of protracted illegal strike action in the South African industry, which drove a 12% drop in refined mine production.
“The pieces are in place for further labour unrest as we move into the wage negotiation period in South Africa and shaft restructuring plans are under discussion with government.
“Should these two factors be realised, we expect South African platinum output [to] fail to rebound this year, even after a calamitous 2012,” cautioned Thomson Reuters GFMS Mining Research director William Tankard at the launch of the report.
Nevertheless, global platinum output was expected to “ease back” to a marginal gross surplus this year