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Global platinum supply to contract by 2% in 2018

London, 6 September 2018

  • Full year supply forecast revised downwards following reduced jewellery recycling
  • Overall global demand to fall by 2% compared to 2017
  • Industrial demand to strengthen by 5% to highest level in in 6 years

“Today’s report shows that the global platinum market faces a number of key challenges to both supply and demand. As we have remarked in the past, supply remains constrained and we expect this to remain the case for the foreseeable future.

“An encouraging increase in industrial demand cannot mask a disappointing, but anticipated, fall in demand from the automotive sector. Diesel sales in Western Europe remain weak but we think this story has a long way to run. We continue to scrutinise the extent to which automakers address declining diesel car sales and are switching out palladium for platinum in gasoline cars, while we have been particularly encouraged by a positive shift in the global sentiment towards the inclusion of fuel cell electric vehicles in the future vehicle mix.

“Investment demand fell in the second quarter of the year as reduced ETF holdings outweighed strong bar and coin sales. However, indications from Q3 already suggest this decline will reverse itself during the remainder of 2018. Bar and coin demand remain encouraging with the launch of new coins in the United Kingdom and bars in China, through the WPIC’s partnership with the Royal Mint and Shenzhen Hengfu Yingjia, announced in July. We look forward to making a number of new announcements in the final quarters of the year.”

Paul Wilson, chief executive officer of WPIC

The World Platinum Investment Council (WPIC) today announces the publication of its latest Platinum Quarterly - the first independent, freely-available, quarterly analysis of the global platinum market. This report incorporates analysis of platinum supply and demand for the second quarter of 2018 and includes revisions to the full year forecast.

Today’s report predicts a further tightening of global platinum supply prompted by a reduction in the level of recycling in the jewellery sector. Global platinum supply is forecast to slip by 2% year-on-year to 7,910 koz with most mining regions expected to post lower refined production in 2018 with notable declines in South Africa, Zimbabwe and Russia.

Overall recycling supply is expected to increase this year, although the size of this uptick has today been revised downwards due to an anticipated 10% fall in jewellery recycling.

Global demand for platinum is expected to fall by 2% in 2018 prompted by reductions in automotive, jewellery and investment demand. These declines are expected to outweigh an expected increase in demand for platinum from the industrial sector, with a 60% rebound in petroleum demand following a raft of refinery closures in 2017.

Automotive demand for the year is forecast to fall to 3,130 koz, due to lower diesel production in Western Europe. Although, outside Europe, demand is expected to increase slightly in India and North America in 2018.

Today’s report forecasts that investment demand will be largely flat compared to 2017 as robust demand for bars and coins, spurred by Japanese bar buying, is outweighed by a marked reduction in ETF holdings in the second quarter.

The market is forecast to be in surplus for the year with Above Ground Stocks (the year-end estimate of the cumulative platinum holdings not associated with ETFs, metal held by exchanges or working inventories of mining producers, refiners, fabricators or end-users) expected to end the year at 2,495 koz.

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Claire Maloney or Simon Evans
CNC Communications

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