Platinum will remain in deficit until 2021
The platinum market will stay in a shortage for the next six years as supplies remain constrained amid growing or robust demand from jewellers and car companies, according to a report commissioned by the World Platinum Investment Council.
The deficit, which totalled 365 000 ounces in 2015, would average 250 000 ounces a year until 2021, David Jollie, an independent consultant at Glaux Metal, said in the report. The global truck market, which uses the metal in devices to curb emissions, might double purchases in the next five years, he said.
While platinum has been in annual shortage since 2012, ample supplies of stockpiled metal and China’s slowdown sent prices to a seven-year low this month. The rout has hurt some of the biggest miners, including Lonmin, which has been forced to cut unprofitable production. If prices remain weak, there is a risk that output will decline further.
Jewellery demand is expected to increase by about 1% a year as Indian consumers buy more, while there will probably be little growth in Chinese demand for the items, according to the report.
Total platinum consumption is estimated to total 8.1 million ounces this year.
Platinum for immediate delivery in London has dropped 31% over the past year.