Platinum production to remain flat
In Zimbabwe, platinum mines were able to remain open during the national lockdown implemented on March 30 to contain the Covid-19 pandemic, while some mines ceased activities for a period, but by the end of the second quarter all platinum operations were back at full capacity.
WPIC noted that the country output for the quarter declined 5% (-7koz) to 114koz and less than the decline in concentrate production, as some operations processed previously accumulated in-process inventory to partially offset losses.
Meanwhile, global demand for platinum is forecast to decrease from 8 386koz to 7 438koz, representing a reduction of 11% (-948koz).
Automotive demand is expected to fall by 16% (-464koz), jewellery demand by 14% (-287koz), industrial demand to remain flat (-5koz) and investment demand (comprising bar and coin demand, as well as changes in ETF holdings and changes in stock held by exchanges) to reduce by 15% (-192 koz), all year-on-year.
WPIC said the risk of further Covid-19 mine site disruption still remains as the number of positive cases in the platinum industry continued to rise materially during August. Against this backdrop WPIC assumed that mining workforce Covid-19 protocols will be sufficient to prevent a return to full-scale lockdowns, although some disruption is likely to occur.
“We anticipate that miners will be drawing on in-process inventory to support refined production, and so refined output is expected to exceed mined output. Due to the ACP outage, Anglo American Platinum has reduced their expected refined platinum production in 2020 by 550koz,” WPIC said.
“Initially, it was expected that this would result in an equivalent increase of in-process inventory that would take up to two years to refine. However, due to pandemic-related mining disruptions, the inventory increase will be smaller, with inventory levels returning to normal by the end of 2021.”