The World Platinum Investment Council (WPIC) today announces the publication of its sixth Platinum Quarterly [http://www.platinuminvestment.com ] - the first independent, freely-available, quarterly analysis of the global platinum market. The report incorporates analysis of platinum supply and demand during the fourth quarter of 2015 and for the full year 2015. The report also provides a forecast of supply and demand for the full year 2016.
Platinum Quarterly is a WPIC publication. It is largely based upon research and detailed analysis commissioned with, and conducted by, SFA (Oxford), an independent authority on the platinum group metals [http://www.sfa-oxford.com/SFA-Content-Page.asp?PageID=SFA-Platinum-Metals ] market. Three additional themes in the Foreword to this edition are: Recent price performance; platinum investment market development; the medium and long term outlook for platinum.
Overview of key data presented in Platinum Quarterly:
The global platinum market ended year 2015 in deficit by 380 koz (2014: 725 koz) with key drivers of the shortfall including:
- 2015 saw a 5% increase in automotive demand, reaching 3,455 koz, up from 3,290 koz
in 2014 and 3,160 koz in 2013. Despite the impact of the Volkswagen diesel
investigation, demand growth in 2015 was led by Western Europe vehicle sales growth,
up 9% 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%.
- Global investment demand increased by 110 koz over the year (73%), with a global fall
in ETF holdings eclipsed by a surge in demand for bars and coins, particularly in
Japan which experienced record buying in the final quarter.
- There was a 4% increase in industrial demand during 2015, buoyed by a 2% 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 (2014: 65 koz vs
2015: 160 koz).
- Jewellery sales contracted by 4% over the year affected by a fall in Chinese demand.
In contrast, demand for platinum in India surged by 26% on the back of strong bridal
growth and increased sales of men's jewellery.
- Refined production grew by 24% over the year, led by a 41% increase in output from
South Africa, where operations affected by the 2014 strikes returned to pre-strike
levels and producer sales again exceeded refined production.
- Global supply from recycled platinum fell by 15% over the year to 1,725 koz, as lower
platinum group metals prices reduced the flow of scrap catalysts from collectors,
while depressed steel prices reduced the scrapping of vehicles.
- Above ground stock levels ended 2015 at 2,315 koz, down by 14% from 2,695 koz in 2014.
Forecasting a deficit of 135 koz in 2016, today's data from SFA (Oxford) shows:
- A 1% contraction in refined production over the course of 2016. South African
supply is predicted to fall by 2% over the year due to disruptions related to wage
negotiations and safety stoppages.
- Recycling supply is forecast to rebound by 14% in 2016, compared to the 15%
contraction in 2015.
- Automotive demand is predicted to increase by 3% on the back of another year of light
vehicle sales growth and higher loadings per vehicle.
- Jewellery sales are expected to return to growth, up 1% in 2016, boosted by a recovery
in China and strong demand growth in India, where the Evara Platinum programme
continues to expand.
Paul Wilson, chief executive officer of WPIC commented:
"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 jewellery demand in Asia. It is encouraging to see that personal disposable income - which is linked to China jewellery consumption - is growing at a rate almost double that of the overall economy."
"On the supply side a forecast of 3% growth in 2016 relies upon a 14% 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."
To download this edition of Platinum Quarterly and/or subscribe to receive the research in the future, without charge, please visit our website: http://www.platinuminvestment.com