THE World Platinum Investment Council (WPIC) and Swiss metal refiner, Valcambi, have signed an agreement to sell platinum bar and coins, primarily in the US, in an effort that will grow incremental physical demand for the metal by up to 100,000 ounces a year.
The parties have collaborated in the past when they co-operated to boost the availability of physical platinum in the Asian and European markets, the WPIC said an announcement today.
Under the terms of the new agreement, the WPIC will act as Valcambi’s funding, stocking and marketing partner accessing Valcambi’s core dealer and secondary networks.
The products will be minted by Valcambi in sizes from one gramme to 1,000 grammes and would be sold through the Swiss firm’s extensive network of online and high street dealers worldwide.
The WPIC said increased availability of existing and new platinum products would result in “… a significant increase in global platinum investment demand”. The early indications from research by the WPIC and Valcambi were that incremental annual demand could be between 50,000 and 100,000 oz, they said.
“We believe this partnership is a crucial step in helping to address the gap in the market for platinum investment products, particularly in the US where investors currently have limited access to platinum,” said Marcus Grubb, director of market development at the WPIC.
Michael Mersaric, CEO of Valcambi, said his company would first “… increase the range and availability of platinum products sold through our extensive retail network”.
“The programme is intended to stimulate demand for platinum investment bars and coins, focusing initially on the US retail market, where it is apparent there is significant demand for physical platinum products,” the WPIC said.
In January, the WPIC said it had been approved as a foreign associate of the Singapore Bullion Market Association which would help it lift the metal’s profile as an investment target.
The global platinum market deficit would narrow for a second successive year, according to WPIC comments in March. However, safety stoppages and interruptions stemming from wage negotiations would see South African output of the metal drop in 2016.
The WPIC was co-founded by South Africa’s largest platinum producers including Anglo American Platinum and Impala Platinum, and Lonmin. Its data is compiled by SFA (Oxford), an independent market consultancy.
Including supplies from recycling, which is expected to rebound 14% compared to the 15% retraction in 2015, overall global supply of platinum is expected to increase 3%. This is owing to an increase in automotive demand, especially in light vehicles where the loadings of platinum in autocatalysts increase, it said in March.
The platinum price has improved 22% in dollar terms since the beginning of the year. It was last trading at $1,059/oz, levels last seen in July last year.
