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The World Platinum Investment Council (WPIC) released its sixth Platinum Quarterly report, in which it noted that 2015 saw an increase of 5 percent in automotive demand for platinum.
The World Platinum Investment Council (WPIC) released its sixth Platinum Quarterly report, in which it noted that 2015 saw an increase of 5 percent in automotive demand for platinum.
As quoted in the press release, other highlights from the report included:
The global platinum market endedyear 2015 in deficit by 380 koz (2014: 725 koz) with key drivers of the shortfall including:
- 2015 saw a 5% increase in automotive demand, reaching 3,455 koz, up from 3,290 koz in 2014 and 3,160 koz in 2013. Despite the impact of the Volkswagen diesel investigation, demand growth in 2015 was led by Western Europe vehicle sales growth, up 9% year-on-year, where the imposition of the new Euro 6 legislation also increased platinum loading per car. Automotive demand fromIndia, also grew by 9%.
- Global investment demand increased by 110 koz over the year (73%), with a global fall in ETF holdings eclipsed by a surge in demand for bars and coins, particularly in Japan which experienced record buying in the final quarter.
- There was a 4% increase in industrial demand during 2015, buoyed by a 2% increase in chemical demand growth driven by North America, Western Europe and China. Greater global demand for oil refining and a swing from refinery reductions to net capacity expansion saw demand from the petroleum sector more than doubling (2014: 65 koz vs 2015: 160 koz).
- Jewellery sales contracted by 4% over the year affected by a fall in Chinese demand. In contrast, demand for platinum in Indiasurged by 26% on the back of strong bridal growth and increased sales of men’s jewellery.
- Refined production grew by 24% over the year, led by a 41% increase in output from South Africa, where operations affected by the 2014 strikes returned to pre-strike levels and producer sales again exceeded refined production.
- Global supply from recycled platinum fell by 15% over the year to 1,725 koz, as lower platinum group metals prices reduced the flow of scrap catalysts from collectors, while depressed steel prices reduced the scrapping of vehicles.
- Above ground stock levels ended 2015 at 2,315 koz, down by 14% from 2,695 koz in 2014.
WPIC CEO Paul Wilson said:
Today’s Platinum Quarterly clearly shows that the fundamentals of the platinum market are sound. Demand from all sectors remains robust, supported by growth in European diesel platinum demand and resilient jewellery demand in Asia. It is encouraging to see that personal disposable income – which is linked to China jewellery consumption – is growing at a rate almost double that of the overall economy.
On the supply side a forecast of 3% growth in 2016 relies upon a 14% rebound in recycled supply. Meanwhile, sentiment driven supply from vaulted investor holdings looks less likely to satisfy market shortfalls than it did over the past four years.