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SA platinum output up 8% in 2006
Allan Seccombe
Posted: Tue, 25 Apr 2006

[miningmx.com] -- THE global platinum market will return to a surplus situation this year as South African output growth shadows that of previous years, the GFMS Platinum & Palladium Survey 2006 shows.

Platinum prices will trade between $980 and $1,250/oz this year and palladium in a $250-$400 range, GFMS said.

South Africa, which produces 56% of the world’s platinum and nearly 40% of its palladium, will increase output well above the annual average of five percent over the past decade as ramp-up projects kick in and full production starts at Two Rivers.
Gains in autocatalysts eclipsed by a substantial decline in platinum jewellery
South African platinum output will grow by eight percent year-on-year and palladium by nine percent in 2006.

In 2005, South African platinum output growth of three percent year-on-year was the lowest since 1998, partly because of disruptions caused by an explosion at Anglo Platinum’s Polokwane smelter.

There was strong demand for platinum in autocatalysts in 2005, the survey showed, but other sectors were battered by high prices for the metal.

“However, with demand in other industrial applications remaining steady, the gains in autocatalysts were eclipsed by a further substantial decline in platinum jewellery fabrication,” GFMS said.

Use of palladium in autocatalysts – the biggest offtake for the metal – stabilised last year, and there is increased demand for the metal as jewellery.

GFMS estimated 2005 platinum supply up four percent at 7.48 million oz and demand at 7.53 million oz. Palladium supply was up six percent at 7.56 million oz and demand rising by a similar amount to 7.83 million oz.

Norilsk Nickel is said to be forecasting a seven percent decline in palladium output to 2.9 million oz and a similar fall in platinum production to 895,000 oz.
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North American platinum group metal production is expected to recover this year after a difficult 2005.

“Zimbabwe should see a modest improvement in output in 2006 thanks to an expansion at Mimosa,” GFMS said.

Global platinum mine production will rise six percent in 2006 and palladium one percent, it added.