Automotive demand for platinum strengthens in 2015

Automotive demand for platinum strengthens in 2015
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The World Platinum Investment Council (WPIC), London, has announced the publication of its sixth “Platinum Quarterly,” which analyses the global platinum market. The report incorporates analysis of platinum supply and demand during the fourth quarter of 2015 and for the full year and also provides a forecast of supply and demand for the full year 2016.

The publication is based largely on research and detailed analysis commissioned with and conducted by, SFA (Oxford), Oxford, U.K., an independent authority on platinum group metals. Three additional themes in the Foreword to this edition are recent price performance, platinum investment market development and the medium- and long-term outlook for platinum.

According to the report, the global platinum market ended year 2015 in deficit by 380,000 ounces, which compares with 725,000 ounces in 2014, with key drivers of the shortfall including:

• a 5 percent increase in automotive demand, reaching 3,455,000 ounces, up from 3,290,000 ounces in 2014 and 3,160,000 ounces in 2013 (Despite the impact of the Volkswagen diesel investigation, demand growth in 2015 was led by Western Europe vehicle sales growth, up 9 percent year on year, where the imposition of the new Euro 6 legislation also increased platinum loading per car. Automotive demand from India, also grew by 9 percent.);
• an increase in global investment demand of 110,000 ounces, or 73 percent, over the year, with a global fall in ETF (exchange traded funds) holdings eclipsed by a surge in demand for bars and coins, particularly in Japan which experienced record buying in the final quarter;
• a 4 percent increase in industrial demand during 2015, buoyed by a 2 percent increase in chemical demand growth driven by North America, Western Europe and China (Greater global demand for oil refining and a swing from refinery reductions to net capacity expansion saw demand from the petroleum sector more than doubling from 65,000 ounces in 2014 to 160,000 ounces in 2015.);
• a 4 percent contraction in jewelry arising from declining Chinese demand (In contrast, demand for platinum in India surged by 26 percent on the back of strong bridal growth and increased sales of men’s jewelry.);
• a 24 percent increase in refined production, led by a 41 percent increase in output from South Africa, where operations affected by the 2014 strikes returned to prestrike levels and producer sales again exceeded refined production;
• a 15 percent decline in global supply from recycled platinum as lower platinum group metals prices reduced the flow of scrap catalysts from collectors, while depressed steel prices reduced the scrapping of vehicles; and
• above-ground stock levels declined 14 percent to 2,315,000 ounces.

Forecasting a deficit of 135,000 ounces in 2016, data from SFA (Oxford) show:

• a 1 percent contraction in refined production over the course of 2016, with South African supply predicted to fall by 2 percent in light of disruptions related to wage negotiations and safety stoppages;
•  a 14 percent rebound in recycling supply in 2016;
• a 3 percent increase in automotive demand in light of increased light vehicle sales and higher loadings per vehicle; and
•    a 1 percent increase in the jewelry sector in 2016, boosted by a recovery in China and strong demand growth in India.

Paul Wilson, chief executive officer of WPIC, says, "Today’s ‘Platinum Quarterly’ clearly shows that the fundamentals of the platinum market are sound. Demand from all sectors remains robust, supported by growth in European diesel platinum demand and resilient jewelry demand in Asia. It is encouraging to see that personal disposable income, which is linked to China jewelry consumption, is growing at a rate almost double that of the overall economy."

He continues, "On the supply side, a forecast of 3 percent growth in 2016 relies upon a 14 percent rebound in recycled supply. Meanwhile, sentiment driven supply from vaulted investor holdings looks less likely to satisfy market shortfalls than it did over the past four years."

The “Platinum Quarterly” is available for download at www.platinuminvestment.com. 

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Source: Recycling Today
Automotive demand for platinum strengthens in 2015
<![CDATA[The World Platinum Investment Council (WPIC), London, has announced the publication of its sixth “Platinum Quarterly,” which analyses the global platinum market. The report incorporates analysis of platinum supply and demand during the fourth quarter of 2015 and for the full year and also provides a forecast of supply and demand for the full year 2016. The publication is based largely on research and detailed analysis commissioned with and conducted by, SFA (Oxford), Oxford, U.K., an independent authority on platinum group metals. Three additional themes in the Foreword to this edition are recent price performance, platinum investment market development and the medium- and long-term outlook for platinum. According to the report, the global platinum market ended year 2015 in deficit by 380,000 ounces, which compares with 725,000 ounces in 2014, with key drivers of the shortfall including: a 5 percent increase in automotive demand, reaching 3,455,000 ounces, up from 3,290,000 ounces in 2014 and 3,160,000 ounces in 2013 (Despite the impact of the Volkswagen diesel investigation, demand growth in 2015 was led by Western Europe vehicle sales growth, up 9 percent year on year, where the imposition of the new Euro 6 legislation also increased platinum loading per car. Automotive…