Platinum forecast to decline 16 pct in 2015 – GFMS

Otmane El Rhazi from The Bullion Desk.

Platinum prices are forecast to decline 16 percent year-on-year to $1,170 per ounce in 2015, three percent above current spot prices, Thomson Reuters said in its GFMS Platinum & Palladium Survey 2015 released Thursday morning.

“The bearish view is based on the increase in supply, more specifically the estimated 22 percent rise in South Africa’s mine production and 10 percent rise in autocatalyst scrap,” the report said.

Platinum demand is estimated to increase by six percent to an eight year high of 240 tonnes because of increasing gains from the autocatalyst and glass industries.

Autocatalyst, specifically, comprises 41 percent of total demand and is expected to rise as sales of light vehicles in Europe are projected to rise markedly this year due to increasing production and tighter emission standards.

Additionally, car sales in the US and legislative changes in China and India should help add to usage volumes, the report said.

“It appears to us that forward buying programmes by the automotive sector are developing increasing levels of flexibility for these consumers to purchase metal when they want to, rather than need to; the sector is becoming increasingly price-sensitive,” William Tankard, research director for mining at Thomson Reuters, said.

Jewellery demand, meanwhile, will grow at a modest pace of four percent, while retail investment demand is projected to rise by 20 percent on bargain hunting as the price approaches $1,000 per ounce, Thompson Reuters said.

Platinum supply is projected to rise to 219 tonnes, 13 percent higher than 2014 as a rise in South Africa’s mining production is expected to increase by 22 percent. Furthermore, autocatalyst scrap is estimated to increase by 10 percent, it added.

The platinum market is estimated to run a deficit of 21 tonnes in 2015, lower than the 32 tonne shortfall in 2014.

Sister metal palladium is seen breaking through resistance at $860 and $910 per ounce to reach $940 before year-end. But the full year average palladium price is forecast to be broadly flat year-on-year at $800, modestly above current spot prices.

“The outlook for palladium remains bullish as stricter emission standards and rising autocatalyst demand from Europe and China keep the market in a deficit,” the GFMS survey said. 

(Editing by Tom Jennemann)

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