The global platinum market should record a deficit of 235,000 ounces in 2015, the World Platinum Investment Council (WPIC) said, down from 700,000 ounces in 2014.
A 19-percent year-on-year increase in global mine production is the key driver of the narrowing deficit, the WPIC said in a report in Wednesday, forecasting output of 5.71 million ounces and total supply of 7.965 million ounces, up 10 percent year-on-year.
It expects South African production to expand in 2015 as operations normalise in the country following a five-month strike last year, forecasting output of more than 4 million ounces in 2015.
North American output should remain stable around 385,000 ounces, it said, although it lowered its Russian producer guidance for the year slightly to around 690,000 ounces, down seven percent on 2013 and 2014 levels.
On the demand side, WPIC sees growth in automotive, jewellery and industrial applications in 2015 despite global and EU economic concerns, with total demand of 8.2 million ounces, up three percent.
It expects automotive demand to four percent to 3.37 million ounces this year, attributing it to tighter emissions legislation in Western Europe.
“In Europe the total vehicle market is forecast to rise only slightly in 2015, but there should be a return to growth in the heavy-duty market which was affected by price hikes associated with the launch of Euro VI compliant vehicles in 2014,” it said.
Demand in India should also play a part although Japanese demand is likely to be negative over the year as vehicle production contracts slightly, the report said.
Platinum-based jewellery demand is set to rise three percent year-on-year in 2015 to 3,085,000 ounces, it said. But the 95,000-ounces increase is not dominated by growth in China, which accounts for only 20,000 ounces – other contributions are spread between the US at 35,000 ounces, India at 25,000 ounces, Western Europe at 5,000 ounces and the rest of the world at 10,000 ounces.
Elsewhere, industrial demand is expected to grow by nine percent year-on-year to 1,695,000 ounces in 2015, driven primarily by an expansion in China’s PDH capacity, the WPIC said. Industrial demand in Western Europe is likely to decline due to oil refinery closures and capacity reductions, however.
In others, recycling is set to grow seven percent to 2,165,000 ounces in 2015, while investment demand should be 50,000 ounces.
Platinum is currently trading at its lowest level in nearly six years at $1,124 per ounce.
(Editing by Mark Shaw)
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