Precious Metals

2018 forecast to end with platinum surplus

A recent report commissioned by the World Platinum Investment Council suggests the platinum market will end 2018 with a surplus, in contrast to an earlier report that anticipated a worldwide deficit through 2021.

Platinum ore image courtesy of World Platinum Investment Council; mining image courtesy of Johnson Matthey.

A newly released third quarter report issued by the World Platinum Investment Council suggests a worldwide platinum surplus for 2018.

The projection is in sharp contrast to an earlier released report predicting a deficit in the precious metal through 2021.

The most recent report projects the surplus to reach 505,000 ounces, up from 295,000 ounces, primarily the result of weakened jewelry demand. The 2019 market forecast is introduced with a market surplus of 455,000, reflecting increases of 2 percent in both supply and demand. 

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Investment demand in 2019 is expected to be double the 2018 levels, with stronger bar and coin demand and increases in metal purchased for placement into exchange-traded funds.

Global platinum supply during the third quarter of 2018 was 2,115,000 ounces, a 3 percent increase, year on year, in comparison with 2017.

Total mining supply rose 4 percent year on year to 1,630,000 ounces, and recycling contributed a 1 percent improvement, at 485,000 ounces.

Platinum jewelry demand in the third quarter dropped 10,000 ounces, to 580,000 ounces; this demand was primarily from Chinese manufacturing.

Platinum purchased by U.S. investors for exchange-traded funds increased 98,000 ounces, while Japanese investors made net purchases of 7,000 ounces. However, offsetting much of the gains were reductions in ETF holdings, by the United Kingdom, of 64,000 ounces; South Africa, of 32,000 ounces; and Switzerland, of 3,000 ounces.

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