This report incorporates analysis of platinum supply and demand during the first quarter and full year 2019.
The 2019 forecast shows a significant increase in overall platinum demand in 2019, owing to strong investment demand that more than offsets softer demand in the automotive and jewellery segments. The increase in investment demand was driven by a surge in ETF holdings, which gained 690 koz in the first quarter of this year, the largest quarterly ETF gain ever. Demand in quarter one significantly exceeded the strong mine supply, due to release of refined platinum from smelter pipeline stock built up in 2018. The result is the largest quarterly deficit, of 550 koz, since the WPIC commenced publication in 2014.
Although Q1’19 automotive demand was down year-on-year, the rate of decline continues to reduce as independent evidence emerges of exceptionally low NOx emissions from new diesel cars and their importance to automakers (due to their low CO2 emissions) in avoiding heavy fines by meeting EU CO2 emissions targets.
Quarterly jewellery demand fell further year-on-year due to a continued decline in Chinese demand, mitigated by a rise in all other regions. Q1’19 industrial demand was down slightly compared to Q1’18 as growth in demand for platinum in chemical catalysts was offset by declines in the glass manufacturing and other industrial demand segments.
Total global demand for platinum is expected to increase by 8% in 2019 on the back of a strong increase in investment demand. Supply is expected to rise by 4% this year. However, potential power disruptions and industrial action represent risks that could materially reduce South African mining supply during the year.
With demand projected to increase more than supply, the annual 2019 market balance will narrow sharply to a surplus of 375 koz from the previously forecast surplus of 680 koz.