In 2017, total forecast platinum supply is projected to decline by 2% year-on-year to 7 730 000 oz as both primary and secondary supply head for decreases. Refined production is forecast to fall by 1% to 5 960 000 oz as slight increases in Russia and North America are outweighed by production reduction in South Africa and Zimbabwe. Even secondary supply is heading for a 6% dip and jewellery recycling by a substantial 20% drop.

From a supply point of view, nothing is pointing up – yet the price continues to languish and was well below the $950/oz mark at the time of gong to press, with no increase of any significance expected.
At current price levels, half of South Africa’s mines remain lossmaking and the biggest producers are blaming platinum’s doldrums on a combination of uncertain global macroeconomics and negative sentiment.

At the same time, the vagaries of platinum price determination – particularly in futures markets – remain somewhat mysterious and disappointingly opaque.

A futures market record sent to Mining Weekly some time back pointed to negligible near-term trading, but hectic futures trading. At that stage, thousands of contracts – representing multiples of yearly supply – were being traded backwards and forwards, several months out from the dates of scrutiny.

Even at that stage, there were serious doubts about the trades being accompanied by the delivery of any physical platinum metal.

One observer, who had done all the required mathematics, was questioning whether, in the absence of physical delivery, the trades in question could really be classified as trades at all.

At the time, it was calculated that the then registered, available- for-sale, physical volume of platinum on the Nymex was bewilderingly miniscule – something like 1/160th of yearly demand.

If so, it was a tiny volume of physical metal that was supporting the global platinum price – at virtually no cost to the rich controlling northern hemisphere bankers concerned, which sounds exceedingly unfair when one considers the million mouths that arduous platinum mining is required to feed in the poor southern hemisphere.

It was contended at the time that the futures markets were dominating the physical markets, rather than physical markets dominating futures markets, as should be the case.

In such flabbergasting environments, futures markets can set the price at any level, and turn traditional market function on its head.

If it is true that the market is being run in such an unrealistic way, those perpetrating this charade should be rapidly made aware of the reality of 26 people benefiting from every one person who works on a platinum mine in South Africa, as was found in the 370-page study on platinum dependence funded by the Bafokeng community.

Price determination, like justice, needs to be seen to be done. The sweat and tears that go into platinum production and the large numbers of South African men, women and children who are directly and indirectly dependent on it demand full transparency.