This report incorporates analysis of platinum supply and demand during the fourth quarter and full years 2018 and 2019.
The 2019 forecast shows global demand for platinum is set to increase by 5% to 7,740koz. This increase is due to the expected significant rise in investment demand, which offsets weaker forecast demand in automotive, jewellery and industrial segments. Supply growth of 5% exceeds demand growth resulting in the market balance rising from a surplus of 645koz last year to 680koz.
Total investment demand in 2019 is forecast to be 530koz, as strong growth in ETF holdings reverses the net reduction in 2018 and adds another year of strong bar and coin demand. Despite a fall in ETF holdings towards the end of 2018, investors rapidly increased their ETF holdings in the first few weeks of 2019 across western markets and South Africa.
Chemical demand is set to be up by 35koz in 2019, which will offset declines in the glass and other industrial segments. This will see overall industrial demand come close to the high level in 2018 at 1,885koz. The decline in jewellery demand should slow, dropping just 1% to 2,325koz, (2018 was 4% below 2017) due to an easing of the decline in Chinese demand and growth in other regions.
Automotive demand is projected to fall at a far slower rate than in 2018, declining 3% year-on-year to 3,000koz in 2019, compared to a 7% decline in 2018. The smaller decline is partly attributable to a stabilisation of demand in light-duty diesel autocatalysts in India.
Recycling platinum supply is expected to rise 3% to 1,960koz in 2019 due to an acceleration in European autocatalyst recycling, but with slower growth in the US.
2018: Total platinum supply fell marginally in 2018 to 8,010koz owing to lower mining supply, as recycled platinum increased modestly. Platinum demand contracted by 5% to 7,365koz, which resulted in a surplus of 645koz. Low levels of demand were due to declines in jewellery, automotive and investment demand that outweighed improved industrial demand.
Industrial demand was the only segment to see growth in Q4 2018, which was up 7% year-on-year to 460koz owing primarily to a recovery in petroleum requirements. In this quarter, automotive demand declined by 8% year-on-year to 780koz driven by ongoing decline in the Western Europe diesel car market, however this was up 10% from the prior quarter, Q3 18. Demand for jewellery in Q4 2018 dropped 12% to 600koz due to poor retail sales in China leading to weak demand from fabricators. Net investment demand was negative in the quarter as bar and coin sales were unable to offset the net reduction in ETF holdings.