Price of platinum expected to edge up
“Our expectation of a price rise is predicated on a small deficit this year, of nearly 300,000 ounces,” they said.
“We think this will be fuelled by both a contraction in supply, chiefly from South African mines, as well as rising demand,” they said.
“Given this backdrop, we expect platinum to exceed $1,000 per ounce at times in the second half of the year, a level that has exceeded spot prices for all but one week since February 2017,” the analysts said.
In SA, there was a combination of reduced capital expenditure, a lack of new projects and closures of marginal producers. SA is the world’s leading source of platinum.
Supply from SA is expected to fall to a 10-year low of 4.14-million ounces in 2018, excluding the strike-affected 3.2-million ounces recorded in 2014 when there was a six-month work stoppage as the Association of Mineworkers and Construction Union demanded higher wages.
The country accounted for 4.25-million ounces of platinum in 2017 out of total world mined supply of 5.9-million ounces.
For 2018, world mined supply is forecast to fall by 1% to 5.77-million ounces.
Platinum from scrapped autocatalysts, which scrub noxious gases out of diesel-driven engines, will continue its inexorable rise, increasing by 5% in 2018 to 1.23-million ounces. A decade ago, this source supplied 786,000 ounces of platinum.
Source: businesslive.co.za