MW:2015 platinum supplies to remain in a deficit – CPM
Global platinum supplies will remain in a deficit for the second straight year in 2015 despite rising mine production as demand for automobile manufacturing and jewelry is set to rise, CPM Group said on Tuesday.
In its “Platinum Group Metals Yearbook 2015″, CPM Group forecast a global 2015 platinum deficit of 215,000 troy ounces compared with a deficit of 981,000 ounces in 2014.
Platinum fabrication demand, which involves using the precious metal in automobiles, jewelry and electronics, was forecast to reach 7.18 million troy ounces this year, up 2.2 percent from 2014 but below the 7.22 million ounces of 2013.
Increased platinum demand will be partially offset by a rise in supplies, the report showed.
CPM forecast total supply at 6.96 million troy ounces in 2015, up 15 pct from last year but down from 7.35 million ounces in 2013.
Global mine production was estimated at 5.75 million troy ounces, up 20 percent from 2014, when a five-month-long labor strike cut output. This is still down from 6.05 million ounces in 2013. Mine production in the world’s biggest producer South Africa was pegged at 4.03 million ounces this year, up from 3.08 million in 2014 but down from 4.4 million in 2013.
“Some of this supply will be used to rebuild producer stockpiles against the event of another supply disruption as seen in 2014,” said CPM, a commodities market research, consulting and advisory firm.
CPM estimated the average price of platinum will be $1,180.91 per ounce in 2015, down 16 percent from 2014 and the lowest average price since 2006.
“The price of platinum has moved to a discount of gold, at least during the initial months of 2015, which should benefit platinum fabrication demand in jewelry during the year,” CPM stated.
“Heavy persistent selling of long-held platinum group metal (PGM) inventories by investors has brought millions of ounces of PGMs into the market and has been one of the factors weighing on the price of these metals.”
CPM forecast global supplies of palladium at 9.47 million troy ounces in 2015, up 5 percent from 2014.
“Most of the positive fundamentals are already factored into the price of the metal, preventing a strong move higher,” CPM said, adding there is strong fabrication demand in the auto and electronic industries.
