[miningmx.com] – PRODUCTION and cost pressures in South Africa would
contribute towards “solid support” for the platinum price, while positive investment
sentiment for gold would spill over into demand for the white metal.
However, demand for platinum in the manufacture of autocatalysts may be subdued in
Europe amid the ongoing Eurozone crisis.
This is according to Thomson Reuters GMFS which, in its 2012 platinum and palladium
report published today, forecast a trading range of between $1,465 per ounce and
$1,775/oz for platinum in the remainder of 2012.
Investment demand was a factor in last year’s pricing of platinum, said Philip
Klapwijk, global head of Metals Analytics at Thomson Reuters GFMS.
“The fact that platinum prices remained elevated over much of last year – enabling a
new all-time high in annual average terms of $1,722 – was testament to broadly
favourable investor sentiment, evidenced by a 12% rise in world investment demand,’
he said.
“Palladium prices are also likely to benefit from the favourable investor climate
towards precious metals, while the downside may be limited as palladium’s demand
base in autocatalyst is less exposed to Europe and is quite broadly based
geographically,’ said Klapwijk.
Palladium is forecast to trade in a range of $575 to $775 through to end-2012,
Thomson Reuters GFMS said.
Platinum is currently trading at $1,557/oz while palladium was last quoted at
$665/oz.
LOOKING BACK
Last year marked the seventh successive year that the platinum market was in
surplus, although higher global fabrication demand helped narrow the surplus 12% to
735,000 oz, Thomson Reuters GFMS said.
The fabrication demand also offset a 5% in platinum supply last year. Given the
much- publicised problems of South African production, which comprises about 85% of
world production, a supply increase might seem surprising.
However, Thomson Reuters GFMS data also include supply from autocatalyst
recycling and jewellery scrap. There was also an increase in output from Brazilian
firm Vale’s Lac des Iles mine in Canada; the country’s only source of primary platinum
group metal supply.
The deficit in the palladium market halved in 2011 to 313,000 oz. Global fabrication
was at an 11-year high, but only 2% higher year-on-year. Against this, supply of
palladium increased 5%, leading to the reduction in the deficit.
There had also been some liquidations from ETF holdings in palladium and a reduction
in long positions on futures markets. Despite this, palladium prices still posted a
record average high last year of $734/oz, said Klapwijk.
“This followed a dramatic rise in prices during late 2010 and early 2011. And even
though last year saw palladium prices fall by 20% on an intra-year basis, the decline
was limited to the last four months, and driven very much by profit taking,’ he said.
