This report incorporates analysis of platinum supply and demand during the second quarter and full year 2019.
The forecast shows a substantial 9% increase in total platinum demand in 2019, owing to solid investment demand that more than offsets expected demand decreases in the automotive and jewellery segments of 4% and 5% respectively. The unprecedented 855 koz of investment demand in H1’19 is driven by a surge in ETF holdings, which gained 720 koz.
Total platinum supply is expected to rise by 4% this year but growth is mostly due to the refining of mined metal built up in the processing pipeline in South Africa in 2018. Potential power disruptions and industrial action in the second half of 2019 continue to represent risks that could reduce South African mining supply.
With demand projected to increase by more than supply, the annual 2019 market balance will narrow to a surplus of 345 koz from the previously forecast surplus of 375 koz.
In Q2’19 refining of some of built-up pipeline stocks and higher autocatalyst recycling led to a surplus of 220 koz. Following the record deficit of 590 koz in the first quarter, this left the market with a deficit of 370 koz for the first half of the year.
Although Q2’19 automotive demand was softer year-on-year by 50 koz, the rate of decline continues to ease as independent evidence emerges of exceptionally low NOx emissions from new diesel cars and their low CO2 emissions. Diesel vehicles will have a vital role to play in the lower EU CO2 fleet emissions required for automakers to avoid heavy fines. There has been a significant increase in news flow related to more widespread application of fuel cell electric cars and trucks as well as in non-road applications including trains. This highlights the increased likelihood of fuel cell electric vehicles being part of a multi-drivetrain solution to achieve zero on-road emissions.
Quarterly jewellery demand slipped further year-on-year by 30 koz due to a continued decline in Chinese demand.
Q2’19 industrial demand was up slightly compared to Q2’18 as growth in demand for platinum in chemical catalysts and glass manufacturing was offset by a decline in the other industrial demand segment.