Platinum market reports issued independently by Johnson Matthey and the World Platinum Investment Council suggest mining supplies of the precious metal will decrease during 2017.

Strong investment demand, including sales of platinum bars to Japanese investors, offsets reductions in jewelry fabrication in China, which would have led to a smaller deficit in platinum supplies, according to the reports.

Johnson Matthey separately reported on its 2017 projections for palladium demand.

Johnson Matthey

According to the Johnson Matthey analysis, the platinum market in 2016 operated at a deficit for the fifth consecutive year.

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Total supply was 6,109,000 ounces in 2015, and 6,103,000 in 2016, with 6,011,000 ounces projected for 2017; total gross demand in 2015 was 8,271,000 ounces and 8,227,000 in 2016, with demand projected to be 7,606,000 ounces in 2017.

More than 70 percent of platinum supply is generated from mining in South Africa.

Of the overall demand, roughly 40 percent is for the metal’s use in autocatalyst applications, with investment demand well under 10 percent.

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Investment demand totaled 451,000 ounces in 2015 and 620,000 ounces in 2016, with 2017 investment demand expected to reach only 220,000 ounces.

Johnson Matthey estimates that Japanese buyers alone accounted for the combined purchase in 2015 and 2016 of approximately 1.15 million ounces of platinum fabricated into large bars, the highest such sales Johnson Matthey has reported since beginning to measure precious metal demand in the 1980s.

Palladium

Palladium demand in 2017 is expected to reach record levels, according to Johnson Matthey, rising 7 percent to surpass 10 million ounces.

The bulk of this metal, too, is used in automotive and chemical industry applications.

More than 80 percent of the world’s combined palladium supply is from Russia and South Africa.

Investment demand for palladium is forecast to remain in a deficit state for the third consecutive year.

World Platinum Investment Council

The WPIC report focuses primarily on investment supply and demand during the first quarter of calendar year 2017.

The report says that total mine supply of platinum hit 1,303,000 ounces during the first quarter, down 6.3 percent from the same period in 2016. Overall recycling is slated to fall 6 percent, year-on-year, to 1,760,000 ounces in 2017, with secondary supply from jewelry recycling projected to drop by 20 percent.

Investment holdings in exchange-traded funds (ETFs) increased by 65,000 ounces during the first quarter of 2017.

Platinum bar and coin demand, according to the WPIC report, was supported by the sales of 20,000 platinum 1-ounce American Eagle bullion coins in three days. Overall platinum demand during calendar year 2017 is forecast to reach 250,000 ounces.

For the complete Johnson Matthey report, click here. For the World Platinum Investment Council, click here.